m 


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The  Foreign  Relations 
of  China: 

A    History   and   a    Survey 


BY 

Mingchien  Joshua  Bau,  M.A.,  Ph.D. 

Graduate  Tsing   Huh  College,  Yale,   Columbia  and  Johns   Hopkins 

Universities.     Sometime   Holder  Carnegie   Endowment 

International  Law  Fellowship,  etc. 


■.    York  (  Bl 

Fleming  H.  Revell  Company 

I    ON  DOM       AMD       I    DUtBUBBB 


Copyright.  1921,  by 
FLEMING  H.  RE\  ELL  COMPANY 


Printed  in  the  United  States  of  America 


New  York:  158  Fifth  Avenue 
Chicago :  17  North  Wabash  Ave. 
London :  21  Paternoster  Square 
Edinburgh :     75     Princes    Street 


to 


DEDICATED 

TO 

MY  SUFFERING  PEOPLE  IN  CHINA 


PREFACE 

The  purpose  of  this  work  is  to  study  the  foreign  re- 
lations of  China,  and  to  work  out  for  her  a  foreign 
policy.  To  achieve  this  object,  the  author  was  com- 
pelled to  study  the  foreign  relations  of  China  as  a  whole, 
rather  than  to  confine  himself  to  any  particular  phase  of 
the  subject.  Conscious  of  the  danger  of  its  extending  over 
too  wide  a  field,  he  has  limited  the  scope  of  his  work 
to  the  salient  features  only,  omitting  the  minor  and  un- 
important ones.  Aware  also  of  the  possible  risk  of  sac- 
rificing quality  to  quantity  in  undertaking  a  task  of  these 
dimensions,  he  has,  so  far  as  time  and  sources  of  in- 
formation permitted,  brought  each  chapter  to  the  requi- 
site standard. 

In  undertaking  this  work  the  author  was  confronted 
at  every  turn  by  the  difficulty  due  to  the  absence  of 
any  regular  official  publication  of  the  Chinese  Ministry 
of  Foreign  Affairs.  While  there  are  a  few  separate 
pamphlets  that  have  been  issued,  there  is  no  series  of 
publications  comparable  with  the  Foreign  Relations  of 
the  United  States  or  the  State  Papers  of  Great  Britain. 
Hence  the  author  was  obliged  to  resort  to  the  archives 
of  the  Foreign  Offices  of  other  nations  to  find  the  neces- 
sary material.  As  far  as  feasible,  he  has  endeavored  to 
use  first-hand  sources,  Buch  as  treaties,  diplomatic  docu- 
ments, substantiated  facts  of  history,  etc.,  and  has  used 


viii  PREFACE 

dary  sources,  only  in  so  far  as  they  helped  him 
h  the  originals  and  understand  the  same. 

Conscious  of  the  danger  of  expressing  ill-considered 
opinions  or  of  reaching  injudicious  conclusions  relating 
to  so  grave  a  subject  as  the  foreign  relations  of  China, 
the  author  has  entered  into  the  work  with  an  open  mind, 
and  has  aimed  only  to  reach  the  truth.  Particularly 
with  respect  to  Japan,  with  which  country  China  has 
lately  had  such  serious  differences,  he  has  attempted  to 
Stud)  its  policy  and  problems  from  the  point  of  view  of 
Japan,  striving  to  arrive  at  the  real  difficulties  and  causes 
behind  the  actions  of  that  Empire.  It  is  his  conviction 
that,  as  the  interests  and  destinies  of  the  two  countries 
are  so  interwoven,  China  cannot  solve  her  own  problems 
without  at  the  same  time  solving  those  of  Japan ;  nor 
can  Japan  solve  hers  without  at  the  same  time  solving 
those  of  China.  To  this  end,  he  has  striven  to  obtain  a 
dilution  for  both  countries  at  the  same  time. 

The  author  has  undertaken  his  work  with  a  sense  of 
duty  to  his  country  and  to  humanity.  Probably  there  is 
no  question  in  the  history  of  China  which  deserves  the 
attention  of  her  citizens  more  than  her  foreign  relations 
and  the  formulation  of  a  proper  and  fitting  foreign 
policy  to  meet  the  situation.  Ever  since  the  opening  of 
the  country,  the  history  of  China  has  been  dominated  by 
foreign  contacts.  Hence  a  proper  understanding  of  the 
foreign  relations  of  China  and  a  formulation  of  an  ap- 
propriate foreign  policy  are  indispensable  to  her  pres- 
ervation and  well-being.  Going  a  step  further,  China's 
ny  and  welfare  are  intimately  associated  with  the 
destiny  and  welfare,  not  only  of  the  neighboring  states 


PREFACE  ix 

of  the  Far  East,  but  also  of  the  entire  world.  Carryin 
her  citizens  feel,  the  mission  of  promoting  world  peace, 
China's  foreign  relations  and  policy  will  probably  be  the 
keynote,  or  at  least  an  essential  factor,  in  world  peace. 
In  doing  this  work,  therefore,  the  author  feels  that  he 
is  discharging  a  duty  to  his  nation,  and  an  obligation 
to  mankind. 

The  book  is  divided  into  six  parts,  and  thirty-two 
chapters.  As  an  understanding  of  the  diplomatic  history 
of  China  is  necessary  to  the  study  of  the  whole  subject, 
Part  I  covers  the  diplomatic  history  of  China,  divided 
into  four  periods,  the  opening  of  China  (1689-1860),  the 
loss  of  dependencies  (1860-1895),  the  international 
struggle  for  concessions   (1895-1911),  and  international 

cooperation  and  control  (1911 ),  each  constituting 

a  chapter.  Part  II  treats  of  the  policies  of  the  Great 
Powers  in  China, — Russia,  France,  Germany,  Great 
Britain  and  the  United  States.  As  Japan  occupies  such 
an  important  and  dominant  position  in  the  foreign  re- 
lations of  China,  Part  III  is  devoted  exclusively  to  the 
policy  of  Japan  in  China.  It  being  necessary  to  observe 
the  impairments  of  China's  sovereignty,  so  as  to  lead  to 
suggestions  as  to  the  policy  of  recovery,  Part  IV  relates 
to  the  various  forms  of  impairment,  such  as  extraterri- 
toriality and  consular  jurisdiction,  concessions  and  settle- 
ments, leased  territories,  spheres  of  influence  or  interest, 
the  most  favored  nation  clause  as  applied  in  China,  and 
tariff  autonomy.  I'ari  V  deals  with  questions  arising 
since  the  war, — the  New  International  Banking  Con- 
sortium, the  League  of  Nations  and  China,  and  the 
Shantung  Question. — pointing  out  the  significance  in.  and 


x  PREFAi  E 

the  effect  upon,  the  international  relations  of  China, 
and,  in  the  case  of  the  Shantung  Question,  offering  a 
solution  for  the  problem.  Part  VI  formulates  a  foreign 
policy  for  China,  including  the  policy  of  preservation, 
the  policy  of  recovery,  the  policy  of  the  Golden  Rule 
and  the  policy  of  world  welfare,  ending  with  a  special 
policy  toward  Japan. 

I  he  author  wishes  to  acknowledge  his  deep  indebted- 
ness to  all  the  authors  whose  works  he  has  consulted, 
many  of  which  appear  in  the  references  or  footnotes,  to 
the  Department  of  State  for  valuable  assistance  in  ob- 
taining some  necessary  documents,  to  J.  P.  Morgan  & 
Company,  Hew  York,  for  the  information  regarding  the 
New  International  Banking  Consortium,  to  his  revered 
teacher,  Professor  W.  W.  Willoughby,  Johns  Hopkins 
University,  under  whose  supervision  and  guidance  this 
work  was  done,  and  to  Professor  Harlan  P.  Beach,  Yale 
University,  for  kindly  criticisms  and  suggestions. 


Mingchien  Joshua  Bau. 


Johns  Hopkins  University, 
Baltimore,  Maryland. 


CONTENTS 


PART  I 
A  Sketch  of  the  Diplomatic  History  of  China 


I.     The  Opening  of  China  (1689-1860)   . 
II.     The  Loss  of  Dependencies  (1860-1895) 

III.  The  International  Struggle  for  Con- 

cessions (1895-1911)    . 

IV.  International  Cooperation  and  Con- 

trol (1911 )        . 

PART  II 

Policies  of  the  Great  Powers  in  China 

V.  The  Policy  of  Russia    . 

VI.  The  Policy  of  France  . 

VII.  The  Policy  of  Germany 

VIII.  The  Policy  of  Great  Britain     . 

IX.  The  Policy  of  the  United  States 

PART  III 

The  Policy  of  Japan  in  China 

X.  The  Development  of  Japan's  Policy 

in  China 

XI.  Policy  of  Economic  Exploitation 

XII.  Policy  of  Territorial  Expansion 

XIII.  Policy  of  Paramount  Influence 

XIV.  Policy  of  Political  Control 
XV.  The  "Asiatic"  Monroe  Doctrine 

XVI.    The  "Twenty-one    Demands"  as 

Exponent   of   Japan's    Policies    in 
China 

XVII.     THE    Wisdom    OF    Japan's    POLICY    in- 
China        


TAGE 

3 

18 

37 
62 


93 
110 
120 
132 
149 


AN 


181 

192 
207 
216 
230 
243 


254 
263 


Xll 


CONTENTS 


PART  IV 
Impairments  of  China's  Sovereignty 

PAGE 

XVIII.     Extraterritoriality    and    Consular 

Jurisdiction 285 

XIX.     Concessions  and  Settlements    .       .  309 
XX.     Leased  Territories          ....  324 
XXI.     Spheres  of  Influence  or  Interest  .  337 
XXII.     The    Most    Favored    Nation    Treat- 
ment         351 

XXIII.  Tariff  Autonomy 371 

PART  V 
New  Problems  Arising  Since  the  War 

XXIV.  The    New    International    Banking 

Consortium 389 

XXV.     The    New    International    Banking 

Consortium  (Continued)    .        .        .  405 

XXVI.     The  League  of  Nations  and  China  416 

XXVII.     The  Shantung  Question    .        .        .  427 

PART  VI 

A  Foreign  Policy  for  China 

XXVIII.     Policy  of  Preservation        .       .       .     475 
XXIX.     Policy  of  Recovery        ....     485 
XXX.     Policy  of  the  Golden  Rule       .       .     493 
XXXI.     Policy  of  World  Welfare  .        .        .500 
XXXII.    A    Policy    Toward    Japan    in    Par- 
ticular     505 


PART  I 

A  SKETCH  OF  THE  DIPLOMATIC  HISTORY  OF 

CHINA 

I.  The  Opening  of  China 

II.  The  Loss  of  Dependencies 

III.  The  International  Struggle  for  Concessions 

IV.  International  Cooperation  and  Control 


THE  OPENING  OF  CHINA  (1689-1860) 

The  diplomatic  history  of  China  can  be  divided  into 
four  periods.  The  first  period  covers  the  years  from 
1689,  when  China  made  the  first  treaty  with  a  Western 
Power,  to  1860  when  she  first  consented  to  enter  into 
formal  diplomatic  relations  with  the  Powers  at  Peking. 
This  period  is  characterized  by  the  gradual  opening  of 
China  to  the  trade  and  intercourse  of  the  Western  world, 
and  so  it  may  rightly  be  called  the  period  of  the  opening 
of  China. 

Prior  to  the  opening,  China  was  more  or  less  an  iso- 
lated nation.  She  had  had  little  to  do  with  Western 
countries.  Although  there  were  some  travelers  like 
Marco  Polo  who  had  come  to  China  long  before  she  was 
opened,  she  had  had  little  intercourse  with  the  Occident. 
This  isolation  was  not  a  result  of  the  deliberate  choice  of 
the  Chinese.  It  was  rather  an  inevitable  consequence  of 
the  geographical  setting.  On  the  North  she  is  bounded 
by  the  Mongolian  deserts.  As  if  these  natural  barriers 
were  not  enough,  she  built  the  Great  Wall  extending  over 
the  entire  length  of  her  Northern  boundary,  thus  effec- 
tively shutting  out  the  aliens  from  the  North.  On  the 
West  she  was  buttressed  by  the  Himalaya  Mountains, 
which  offered  such  an  effective  obstruction  that  few  peo- 
ple were  likely  to  cross  them.  On  the  South  and  East 
she  was  limited  by  seas  and  oceans  which  separated  her 
effectively  from  the  rest  of  the  world. 

As  a  result  of  this  geographical  isolation  she  devel 
a  type  of  civilization  that  was  unique  and  quite  differ- 
ent  from  the  main  branches  of   European  civilization. 
She  also  became  the  mother  of  (  Iriental  civilization  and  ex- 

3 


4       THE  DIPLOMATIC  HISTORY  OF  CHINA 

tended  her  influence  as  far  as  the  geographical  setting 
would  allow  her.  Toward  the  North  she  extended  her 
civilization  to  the  Mongols  and  the  Manchus.  Toward  the 
West  she  carried  her  civilization  to  Chinese  Turk< 
Sinkiang  and  Tibet.  Toward  the  South  she  sowed  the 
seeds  of  culture  in  Burma,  Annani  and  Siani.  On  the 
East  she  extended  her  civilization  to  Korea  and  Japan. 

This  superiority,  however,  achieved  in  geographical 
isolation,  soon  resulted  in  self-complacency  and  pride. 
Supreme  in  the  Far  East,  she  had  no  rivals.  As  a  re- 
sult, she  became  self-satisfied  and  unprogressive.  She 
remained  so  until  Western  contact  woke  her  from  her 
lethargy.  Thus  we  can  clearly  understand  why,  when 
the  West  came  knocking  at  the  door,  she  was  proud  and 
regarded  all  Westerners  as  barbarians  and  subjects  of 
vassal  states.  We  can  also  understand  why  she  refused 
to  have  her  tranquillity  and  isolation  disturbed  by  the 
intrusions  of  the  West. 

The  Portuguese  were  the  first  to  arrive.  They  landed 
in  1517  at  St.  John's  Island  in  South  China,  and  later 
in  1557,  they  occupied  the  present  city  of  Macao,  which 
became  the  chief  trading  port  of  South  China — before 
the  rise  of  Hongkong.  Next  to  the  Portuguese  came  their 
rivals,  the  Spaniards,  who  crossed  over  from  Manila  in 
1575.  Then  came  the  Dutch  in  1622  who  occupied  the 
Island  of  Formosa  until  1661,  when  they  were  driven 
out  by  the  conquering  Koxinga.  In  1655  they  sent  an  em- 
bassy to  Peking,  asking  for  privileges  of  trade.  They 
performed  all  the  rites  required  of  them — kneeling  and 
prostration  (kowtow) — and  also  offered  tribute  as  from 
a  vassal  state.  In  spite  of  their  efforts,  however,  they 
only  obtained  the  privilege  of  coming  to  trade  once  in 
eight  years  and  each  time  not  exceeding  a  hundred  men. 
About  the  same  time,  in  1653,  Russia  also  came  over  by 
land  and  asked  for  commercial  privileges,  but  as  the 
embassy  refused  to  kowtow,  the  mission  was  not  granted 
an  audience. 


THE  OPENING  OF  CHINA  5 

The  first  treaty  of  China  was  commonly  called  the 
Treaty  of  Nerchinsk,  August  27,  1689.  It  was  made  in 
consequence  of  the  Russian  construction  of  some  forts  at 
Albazin  and  Karmarskai-Astrog  which  the  Chinese 
thought  was  an  invasion  of  their  territory  and  for  which 
reason  they  attacked  the  forts  and  demolished  the  one 
at  Albazin.  Thereupon,  a  border  war  ensued,  with  alter- 
nating triumphs  for  both  sides.  This  treaty  signed  at 
Nerchinsk  ended  the  war.  The  rivers  Rerbetchi  and 
Ergone  were  made  boundaries.  The  fortress  built  at 
Albazin  was  to  be  demolished.  Extradition  and  extra- 
territoriality of  a  primitive  character  were  provided.  The 
right  to  travel  with  passports  and  to  trade  was  recipro- 
cally given. 

Subsequently,  further  treaties  were  made  with  Rus- 
sia. On  October  21,  1727,  the  treaty  of  Kiakhta  was 
concluded.  The  boundary  at  and  near  Kiakhta  was  de- 
fined. Frontier  trade  was  regulated  and  jurisdictional 
differences  were  settled.  A  Russian  embassy  was  per- 
mitted to  reside  in  Peking,  and  four  youths  and  two 
adults  were  permitted  to  study  the  Chinese  language  and 
four  priests  to  practice  their  cult.  This  treaty  of  Kiakhta 
was  amended  in  1768,  regulating  more  specifically  fron- 
tier extradition  and  criminal  jurisdiction.  In  1792  a 
further  convention  was  signed  by  the  Governor  of  Ir- 
kutsk and  the  Chinese  frontier  officers,  regulating  com- 
merce at  the  border. 

These  treaties  with  Russia  did  not  open  China  up  in 
any  way.  either  for  foreign  trade  or  diplomatic  inter- 
course. What  the  Russians  obtained  through  these  trea- 
.  as  trade  privileges  at  the  frontier  and  the  right  of 
nee  for  tin-  Russian  Embassy  at  Peking.  Hence, 
;  [is  arrived  at  Canton  i<>v 

trade,  the   Imperial  order  decreed  that   Russia,  having  the 
privilege  of  trading  at  the  land  frontier,  was  nut  allowed 
to  trade  by  sea,  and,  therefore,  excluded   from  a 
trade  of  China.     Later,  Admiral   Count    Initiation   was 


6       THE  DIPLOMATIC  HISTORY  OF  CHINA 

commissioned  as  Russian  Envoy  and  came  to  Peiho  and 
asked  for  the  privilege  of  maritime  trade  and  upon  being 
refused  there,  he  went  down  to  Hongkong  in  1857  and 
joined  the  Allied  diplomats  of  England  and  France  and 
sought  for  maritime  trade  privileges  under  the  aegis  of 
\llied  forces,  then  in  operation  against  China  dur- 
ing the  second  war  between  Great  Britain  and  China. 

So  far  none  of  the  European  States  was  able  to  effect 
the  opening  of  China.  The  task  finally  fell  on  the 
shoulders  of  Great  Britain.  Not  without  initial  rebuffs 
and  adverses,  however,  did  Great  Britain  perform  the 
task.  In  1793  Lord  Macartney  came  to  Taku,  and  thence 
he  was  convoyed  to  Peking  in  boats  and  carts  bearing 
the  inscription  "Ambassador  bearing  tribute  from  the 
country  of  England."  *  His  mission  resulted  in  failure. 
Again  in  1816  Lord  Amherst  went  to  Peking,  but  as  he 
refused  to  kowtow,  and  to  be  hurried  to  an  Imperial 
audience  early  in  the  morning  immediately  upon  his 
arrival,   he    had   to   depart   in   disappointment. 

Rebuffed  but  not  discouraged,  Great  Britain  persisted 
in  her  task.  In  1834,  she  abolished  the  monopoly  en- 
joyed by  the  East  India  Company  and  instituted  free 
trade  in  Canton ;  and,  to  supervise  British  trade,  three 
superintendents  were  appointed,  of  which  Lord  Napier 
was  chief.  The  latter  came  to  China  with  the  su- 
preme resolve  to  open  up  China  and  to  assert  national 
equality.  He  came  to  Canton  from  Macao  without  per- 
mit from  the  Chinese  local  authorities,  which  was  re- 
quired at  that  time ;  and  besides,  he  intended  to  deliver 
a  letter  and  not  a  petition  to  the  Viceroy.  His  action 
so  incensed  the  Viceroy  that  he  was  refused  a  conference 
until  he  had  retired  to  Macao  and  come  up  in  accordance 
with  the  established  ruie,  which  Lord  Napier  refused 
to  do.  A  deadlock  between  the  Viceroy  and  Lord  Napier 
ensued,  resulting  in  the  stoppage  of  British  trade.  Mean- 
while, malarial  fever  overtook  Lord  Napier,  which  com- 


THE  OPENING  OF  CHINA  7 

pelled  him  to  retire  to  Macao,  where  he  died  on  October 
11,  1834. 

After  the  death  of  Lord  Napier,  the  superintendents 
who  succeeded  him  adopted  a  quiescent  policy,  com] liv- 
ing generally  with  the  regulations  of  the  Canton  authori- 
ties. But  in  1836  Captain  Eliot  was  appointed  chief 
superintendent,  and  with  his  advent,  events  took  a  sharp 
turn,  leading  to  the  first  war  between  China  and  Great 
Britain   (1840-1842). 

In  1838  Lin  Tse-Hsi  was  appointed  Imperial  High 
Commissioner  at  Canton.  He  came  with  the  Imperial 
Commission  to  exterminate  the  opium  traffic  which  for- 
eign traders,  mainly  the  British,  had  been  illegally  carry- 
ing on  with  the  connivance  of  corrupt  Chinese  officials. 
His  policy  was  first  to  destroy  all  the  opium  in  the  pos- 
session of  foreign  traders,  and  then  to  safeguard  the 
future  by  requiring  them  to  deposit  bonds  as  a  pledge 
that  they  would  not  deal  in  opium  thereafter.  lie 
therefore  demanded  the  surrender  of  all  the  opium  in 
possession  of  the  foreign  communities.-  Upon  refusal 
of  the  foreign  communities  to  deliver  up  the  opium,  he 
declared  martial  law  and  put  the  British  factory  and 
community  under  military  quarantine.  He  made  the 
blockade  so  effective  that,  in  a  few  days,  deprived  of 
food  and  other  supplies,  the  foreign  community  was 
on  the  verge  of  starvation.  Consequently,  Eliot  yielded 
on  March  27,  1839,  and  surrendered  the  stock  of  opium 
amounting  to  20,291  chests,3  whereupon  the  blockade 
was  lifted. 

Immediately  thereafter,  Captain  Eliot  ordered  his  coun- 
trymen to  prepare  to  leave  in  a  body;  and  also  an- 
nounced that  he  would  ask  the  Queen  to  exacl  due 
indemnity  for  the  opium  so  arbitrarily  seized.  On  May 
24,  1839,  the  whole  British  community  moved  from  Can- 
ton to  Macao,  where  Captain  Eliot  waited  for  instruc- 
tions from  home. 


8        THE  DIPLOMATIC  HISTORY  OF  CHINA 

Meanwhile,  another  event  transpired  which  made 
war  inevitable.  A  party  of  British  sailors,  while  on  the 
Kowloon  side  of  the  Hongkong  anchorage,  murdered  a 
Chinese  named  Lin  Wei-li  during  the  course  of  a  riotous 
search  for  intoxicating  liquor.  Commissioner  Lin  de- 
manded an  immediate  redress  by  the  surrender  of  the 
British  murderer.  Having  obtained  no  satisfaction,  to 
enforce  his  demands,  he  moved  his  forces  to  Heungshan, 
and  issued  two  orders  on  August  15,  1839,  one  cutting 
off  the  supplies  of  the  British  in  Macao  and  the  other 
ordering  all  Chinese  servants  to  leave  their  British  mas- 
ters, whereupon  the  British  moved  from  Macao  to  Hong- 
kong. On  October  25  he  issued  a  peremptory  order  for 
the  surrender  of  the  murderer,  and  three  days  later 
threatened  to  blockade  Hongkong  and  to  effect  the  arrest 
of  the  murderer  himself.  On  November  3,  1839,  the 
first  naval  battle  was  fought  in  Chuenpi,  which  marked 
the  beginning  of  the  first  war  between  China  and  Great 
Britain. 

The  issues  of  the  war  were  quite  clear.  On  the  part 
of  the  Chinese,  opium  was  the  great  issue.  To  extermi- 
nate the  opium  evil  was  the  supreme  aim  of  the  war. 
The  jurisdiction  over  criminals  of  the  homicide  class 
was  a  subsidiary  issue.  On  the  part  of  the  British,  how- 
ever, reparation  for  the  loss  of  opium,  the  granting  of 
better  trade  privileges  and  the  recognition  of  national 
equality  were  the  primary  causes,  while  opium  was  a 
mere  incident. 

The  British  won  the  war.  As  a  result,  the  treaty  of 
Nanking'*  was  signed  on  August  21',  1842.  Five  treaty 
ports  were  opened, — Canton.  Amoy,  Foochow,  Ningpo 
and    Shanghai.      Hongkong   was   ceded    in   per; 

Britain.  An  indemnity  of  twenty-one  million  dol- 
lars was  paid.  Equal  status  in  diplomatic  correspondence 
was  I  rved.    Tariff  was  to  be  uniform  and  fair. 

A  supplementary  treaty  of  October  8,  1843,  was  subse- 
quently  signed,   providing    for  a  conventional   tariff  of 


THE  OPENING  OF  CHINA  9 

five  per  cent  ad  valorem  and  extra-territoriality.5  Follow- 
ing the  British,  the  Americans  signed  the  Treaty  of 
Commerce  on  July  3,  1844,  and  the  French,  on  October 
24,  1844.  Belgium  secured  trade  privileges  by  an  Im- 
perial rescript  of  July  25,  1845 ;  Sweden  and  Norway 
signed,  on  March  20,  1847,  a  Treaty  of  Commerce,  vir- 
tually the  same  as  the  American  Treaty  of  1844. 

The  first  war  with  Great  Britain  accomplished  only  a 
part  of  what  the  British  had  set  out  to  do.  It  opened  up 
five  ports  of  South  China  to  the  trade  of  the  world.  It 
provided  for  a  semblance  of  national  equality  in  diplo- 
matic dealings.  But  still  it  failed  to  open  up  the  whole 
of  China,  especially  the  Yangtze  Valley,  which  was  the 
goal  of  British  merchants.  It  further  failed  to  provide 
for  diplomatic  dealings  direct  with  the  Peking  court. 
All  these  were  left  to  be  accomplished  by  the  second 
war  between  Great  Britain  and  China  (1858-1860). 

As  the  first  war  was  not  decisive,  the  Chinese  were 
not  convinced  that  they  were  inferior  to  the  Westerners, 
nor  were  they  willing  to  welcome  Western  intercourse 
thus  imposed  on  them.  They  still  cherished  hopes  of 
keeping  Occidentals  at  a  distance  and  indulged  in  thoughts 
of  Oriental  superiority.  Thus  when  the  opening  of  Can- 
ton was  due,  the  Cantonese  resisted,  and,  as  a  result, 
a  violent  riot  took  place.  The  entry  into  Canton  was  there- 
fore postponed,0  but  it  was  not  waived.  In  the  next 
year  it  was  definitely  postponed  to  1849. '  But  when 
the  time  came  for  opening,  the  Cantonese  still  obsti- 
nately refused  to  comply  with  the  agreement. 

During  this  interval,  the  Cantone.se  became  more  and 
more  hostile.     They  felt  they  wen  wronged  by 

tin-  British  who  forced  the  opium  traffic  on  them.  They 
■  •'1  deeply  the  intrusion  and  compulsory  intercourse 
of  the  unwelcome  Western  barbarian.  Tiny  entertained 
the  hope  that,  as  si nm  as  a  chance  should  offer  itself, 

would  expel   all    Western   disturbers  •>!'    their   | 


10     THE  DIPLOMATIC  HISTORY  OF  CHINA 

The  prevailing  sentiment  of  that  time  can  be  well  dis- 
cerned in  the  following  extract  of  a  placard,  the  like  of 
which  was  quite  common  during  these  years  of  irrita- 
tion and  excitement.8 

"If  the  barbarians  make  a  single  move,  then  sound 
the  tocsin,  in  every  place,  and,  united  in  mind  and 
strength,  at  one  beat  of  the  drum  we  will  take  them, 
and  absolutely  kill  every  one  of  the  barbarian  rebels,  and 
not  leave  a  blade  of  grass  an  inch  high,  nor  allow  the 
creepers  to  spread." 

On  the  other  hand,  the  British,  on  account  of  their 
victory,  became  quite  arrogant  and  insolent.  They  cast 
aside  their  former  respect  for  the  wonders  of  Chinese 
civilization  and  openly  asserted  that  they  would,  and 
could,  thereafter  dictate  their  demands  to  the  Chinese. 
In  a  letter  to  his  plenipotentiary  instructing  the  latter 
to  protest  against  the  growing  hostile  feeling  of  the  Can- 
tonese, Lord  Palmerston  used  the  following  language : 9 10 

"Now  they  appear  to  be  encouraging  and  exciting 
among  the  people  of  Canton  hostile  feelings  towards 
British  subjects;  but  let  them  not  deceive  themselves. 
The  forbearance  which  the  British  Government  has 
hitherto  displayed  arises,  not  from  a  sense  of  weakness, 
but  from  the  consciousness  of  superior  strength.  The 
British  Government  well  knows  that,  if  occasion  required 
it,  a  British  military  force  would  be  able  to  destroy  the 
town  of  Canton,  not  leaving  one  single  house  standing, 
and  could  thus  inflict  the  most  signal  chastisement  upon 
the  people  of  that  city." 

Chafing  under  the  dissatisfaction  of  the  existing  ar- 
rangements, a  movement  was  put  on  foot  to  effect  a  re- 
vision of  treaties.  In  accordance  with  the  American  and 
French  Treaties,  the  revision  was  to  take  place  at  the 
end  of  twelve  years,11  that  is,  in  1856.  While  the  Treaty 
with  Britain  did  not  provide  for  revision,  the  operation  of 


THE  OPENING  OF  CHINA  11 

the  most  favored  nation  clause  12  would  nevertheless  give 
the  British  the  same  right.  They  first  attempted  to 
induce  Commissioner  Yeh  of  Canton  to  enter  into  a 
treaty  revision,  but  the  latter  declined.  They  then  went 
North,  first  to  Nanking  and  from  thence  to  Peiho,  but 
at  each  turn  they  were  told  that  no  material  or  radical 
modifications  could  be  made  and  that  the  only  channel  of 
diplomatic  intercourse  and  hence  of  treaty  revision  was 
Commissioner  Yeh  of  Canton. 

Baffled  by  this  opposition,  they  became  convinced  that 
the  only  way  to  bring  about  a  treaty  revision  was  to  use 
force,  or,  in  other  words,  to  make  another  war.  Events 
soon  developed  that  excuses  were  found.  On  February 
29,  1856,  Auguste  Chapdelaine  was  executed  by  the  local 
Chinese  authority  of  Kwangsi  after  a  judicial  trial.  He 
was  convicted  of  the  crime  of  coming  out  of  the  five 
treaty  ports  where  the  foreigners  were  supposed  to  be 
confined,  and  also  of  stirring  up  rebellions  in  Kwangsi 
against  the  government.  The  French  envoy  protested. 
He  pointed  out  that  in  accordance  with  the  treaty  pro- 
vision regarding  extra-territoriality,  Frenchmen  should  be 
punished  only  by  French  authorities.13 

As  no  satisfaction  could  be  obtained,  France  was  ready 
to  declare  war.  Availing  herself  of  the  cooperation  with 
Great  Britain  in  the  Crimean  War  (1854-1856)  which  had 
just  drawn  to  its  close  at  that  time,  she  proposed  to 
Great  Britain  that  the  two  Allies  should  continue  their 
cooperation  and  make  war  in  common  on  China,  to  which 
the  British  readily  assented.  The  primary  motive  of  the 
French  was  to  protect  Catholic  missionaries  in  China; 
that  of  Great  Britain,  to  obtain  treaty  revision. 

Shortly  after  another  incident  occurred,  which  gave 
the  Britisli  an  added  impetus  to  enter  upon  the  second 
war.       On     October    8,     1856,     the     lorcha     Arrow    was 

boarded  by  Chinese  soldiers,  and  twelve  of  the  Chinese 
crew  were  taken  away.     The  Arrow  was  one  of  those 

boats  owned  by   the   Chinese  but   flying  a   British    flag 


12     THE  DIPLOMATIC  HISTORY  OF  CHINA 

under  registration  at  Hongkong,  engaged  generally  in  the 

::  not  infrequently  in  smuggling.  The 
British  at  once  protested.  They  claimed  that  the  Ar- 
row, flying  a  British  flag,  was  British  territory  and  that 

ould  be  made  thereon  only  with  the  consent  of 
British.  The  Chinese  on  the  other  hand,  contended 
that  the  lorcha  was  a  Chinese  hoat  and  that  they  were  only 
seeking  a  notorious  rohber  among  the  Chinese  crew.  It 
was  later  discovered  that  the  lorcha's  license  under  British 
protection  had,  according  to  the  law  of  Hongkong,  ex- 
pired eleven  days  before  the  incident,  which  meant,  of 
course,  that  the  lorcha  was  no  more  under  the  British 
protection.14  To  this  the  British  made  the  rebuttal  that 
it  was  impossible  for  the  lorcha  to  reach  Hongkong  in 
time  for  the  renewal  of  the  annual  license  when  engaged 
in    coasting  trade. 

The  war  would  have  commenced  earlier,  had  not  the 
Indian  Mutiny  intervened  on  May  13,  1857,  which  neces- 
sitated the  temporary  diversion  of  the  British  land  forces. 
Naval  warfare,  however,  began  in  the  summer  of  1857. 
Thus  arose  the  second  war  between  China  and  Great 
Britain,  and  this  time  France  was  an  added  factor  in 
the  contest.15 

The  Allies  won  the  war.  As  a  consequence,  Great 
Britain  concluded  the  treaty  of  Tientsin,  June  26.  1858, 
France,  on  June  27,  Russia,  on  June  13,  and  the  United 
States,  on  June  18.  These  four  treaties  were,  in  general, 
approximately  the  same,  and,  because  of  the  most  favored 
nation  clause,  the  privileges  conceded  to  one  were  ex- 
tended to  all  the  others.  We  shall,  therefore,  take  the 
British  Treat}-  as  the  model  which  has  determined  diplo- 
matic relations  of  China  with  the  Western  world  ever 
since.  The  treaty  of  Nanking  of  August  2'\  1842,  was 
confirmed  (Article  l).1"  The  trade  regulations  of  July, 
L843,  writ-  abrogated  and  likewise  the  supplementary 
treaty  of  October,  1843  (Article  1).  "His  Majesty  the 
Emperor  of  China  hereby  agrees,  that  the  Ambassador, 


THE  OPENING  OF  CHINA  13 

Minister,  or  other  diplomatic  agents  so  appointed  by  her 
Majesty  the  Queen  of  Great  Britain  may  reside  with 
his  family  and  establishment,  permanently  at  the  Capital, 
or  may  visit  it  occasionally  at  the  option  of  the  British 
Government"  (Article  3).  Rights  of  diplomatic  immuni- 
ties as  established  in  international  usages  were  accorded 
to  the  British  (Article  4)  and  the  Chinese  representative 
reciprocally.  Religious  tolerance  was  provided.  "Brit- 
ish merchant  ships  shall  have  authority  to  trade  upon 
the  great  river  (Yangtze)."  Chinkiang  was  to  be  opened 
at  once  to  foreign  trade;  Hankow  and  Kiukiang  were 
later  selected  as  the  other  trade  ports  (Article  10)  ;  Nevv- 
chang,  Chefoo,  Taiwan,  Swatow  and  Kiungchow  were 
to  be  opened  to  foreign  trade  (Article  11).  "All  ques- 
tions in  regard  to  rights,  whether  of  property  or  per- 
son, arising  between  British  subjects,  shall  be  subject  to 
the  jurisdiction  of  the  British  authorities"  (Article  15). 
Tariff  revision  might  be  demanded  at  the  end  of  ten  years 
(Article  27).  Transit  duties  were  fixed  at  the  rate  of  two 
and  one-half  per  cent  ad  valorem — half  of  the  tariff  rate. 
Most  favored  nation  treatment  of  the  most  comprehensive 
kind  was  accorded :  "The  British  Government  and  the  sub- 
jects are  hereby  confirmed  in  all  privileges,  immunities, 
and  advantages  conferred  on  them  by  previous  treaties; 
and  it  is  hereby  expressly  stipulated  that  the  British  Gov- 
ernment and  its  subjects  will  be  allowed  free  and  equal 
participation  in  all  privileges,  immunities,  and  advantages 
that  may  have  been  or  may  be  hereafter  granted  by  his 
Majesty  the  Emperor  of  China  to  the  government  or 
subjects  of  any  other  nation"  (Article  54).  A  supple- 
mentary agreement  was  signed  at  Shanghai  on  November 
8,  1858,  regulating  trade  and  fixing  the  tariff  at  five  per- 
cent, ad  valorem  with  a  free  list. 

The  ratification  of  the  British,  French  and  Russian 
Treaties  was  t<>  he  effected  at  Peking  within  one  year 
from  tlu-  date  of  signature.  '  'nly  thf  American  Treaty 
did  not  so  provide.     The  French  and  the  British  accord- 


14     THE  DIPLOMATIC  HISTORY  OF  CHINA 

ingiy  went  up  North  to  secure  ratification,  but  upon 
arrival  at  Taku,  the  Allies  found  that  the  forts  were  re- 
constructed and  the  river  was  blockaded  by  heavy  chains. 
In  an  attempt  to  force  their  way  through,  they  were  dis- 
astrously repulsed  by  the  fire  of  the  Taku  forts.  Reen- 
forced,  they  came  up  again  and  this  time  silenced  the 
forts,  and  pushed  up  the  river  until  they  reached  Chang- 
chiawan,  whereupon  the  Peking  Court  sued  for  peace. 

The  provisions  that  were  most  obnoxious  to  the  Im- 
perial Court  were  the  residence  in  Peking  of  the  diplo- 
matic representatives,  the  opening  of  the  Yangtze  to  for- 
eign trade  and  the  right  of  purchase  of  goods  in  the  in- 
terior. These  distasteful  provisions  led  to  the  renewal 
of  resistance  on  the  part  of  the  Imperial  Court. 

Compromise  might  have  been  reached  and  peace  con- 
cluded, had  not  another  unfortunate  event  occurred  which 
impelled  the  Allied  forces  to  march  to  Peking.  On 
September  18,  1860,  a  British  reconnoitering  party  and 
also  a  French  party  were  ambushed  at  Changkiawan  by 
the  Imperial  forces  and  carried  to  Peking,  where  they 
were  subjected  to  torture  and  imprisonment.  This 
led  to  the  onward  march  of  the  Allies  to  Peking.  As 
an  act  of  revenge,  the  British  set  fire  to  the  beautiful 
Summer  Palace,  Yuan  Ming  Yuan.  Thereupon,  the  Im- 
perial Court  fled  to  Jehol,  leaving  Prince  Kung  to  ar- 
range the  terms  of  peace. 

The  subsequent  treaties  of  peace  signed  at  Peking  on 
October  24,  with  the  British,  and  on  October  25,  1860, 
with  the  French,  concluded  the  war.  An  apology  was 
to  be  offered  for  the  obstruction  given  by  the  Taku 
forts.17  The  Treaty  of  Tientsin  was  confirmed  and  rati- 
fied. The  right  of  diplomatic  representatives  to  reside 
at  Peking  was  confirmed.  An  indemnity  of  eight  mil- 
lion taels  was  to  be  paid  to  the  British  and  the  French 
Government  respectively.  Tientsin  was  to  be  opened 
as  a  treaty  port.  Kowloon  was  to  be  ceded  to  Great 
Britain  as  a  buffer  to  Hongkong.     The  Americans,  un- 


THE  OPENING  OF  CHINA  15 

willing  to  be  unfriendly  to  China,  had  exchanged  their 
treaty  of  Tientsin  on  August  16,  1859,  at  Peitang. 

During  the  advance  of  the  allied  forces  on  Peking 
and  their  subsequent  occupation  thereof,  the  Russian  rep- 
resentative, General  Ignatieff,  played  a  most  skillful  diplo- 
matic game.  On  the  one  hand,  he  threatened  that  a  Rus- 
sian fleet  would  be  ordered  to  Peitang.  On  the  other, 
he  offered  cannon  and  supplies  to  the  Imperial  Court 
and  persuaded  the  Allies  to  withdraw.  Posing  as  the 
savior  of  China,  he  pressed  for  the  cession  of  the  Trans- 
Usuri  territory.18  As  a  reward  for  his  service,  he  caused 
the  Imperial  Court  to  conclude  the  treaty  at  Peking  on 
November  14,  1860.  It  was  to  be  a  supplement  to  the 
previous  treaty  of  Aighourn  of  May  16,  1858,  and  the 
treaty  of  Tientsin  of  June  13,  1858.  It  was  mainly  to  fix 
unsettled  boundary  lines  and  to  regulate  commercial  and 
diplomatic  relations.  The  Eastern  frontier  was  defined ; 
the  territory  North  of  the  Amur  was  to  belong  to  Rus- 
sia, and  that  to  the  South  to  China.19  By  this  agreement 
China  lost  her  maritime  province  east  of  the  Usuri.  The 
Western  frontier  was  also  delimited.20 

Thus,  it  can  be  said  that  the  opening  of  China  was  a 
slow  process.  Up  to  1842,  foreign  trade  was  largely 
confined  to  Canton  with  Macao  as  the  base,  except  the 
Russian  trade  at  the  Northern  frontier.  The  first  war 
between  China  and  Great  Britain  resulted  in  the  opening 
of  South  China  through  the  portals  of  the  five  treaty 
ports  as  provided  in  the  Treaty  of  Nanking,  1842.  The 
Treaty  of  Tientsin  of  1858  effected  the  opening  of  the 
Yangtze.  It  was  not,  however,  until  I860,  that  by  tin- 
Treaty   of    Peking   in    1860,   North   China    was   opened 

through  the  door  of  Tientsin,  and  the  diplomatic  relation 

with  the  Imperial  Court  was  definitely  established.  Thus, 

while  the  process  of  opening  is  still  going  on  in  China,  - 
as  the  interior  of  China  IS,  as  yet,  not  open  to  foreign 
trade  and   residence, — it   may    nevertheless   he   said    that 


16     THE  DIPLOMATIC  HISTORY  OF  CHINA 

the  period  of   1689-1860  marked  the  intial  stage  of  the 
opening  uf  China. 


NOTES  TO  CHAPTER  I 

1.  Morse,  the  International  Relations  of  the  Chinese  Empire, 
Vol.  I,  p.  54. 

2.  Ibid.,  p.  216. 

His  order  reads  in  part  as  follows :  "I  now  proceed  to  issue 
my  commands.  When  this  order  reaches  the  foreign  merchants, 
let  them  with  all  haste  pay  obedience  thereto,  and  let  them 
deliver  up  to  the  government  every  particle  of  the  opium  on 
board  their  store-ships.  Let  the  Hong  merchants  make  a  list  of 
the  opium  delivered  by  each  firm,  in  order  that  all  surrendered 
may  be  accounted  for,  so  that  it  may  be  burnt  and  destroyed, 
and  that  thus  the  evil  may  be  entirely  extirpated.  There  must 
not  be  the  smallest  atom  concealed  or  withheld.  At  the  same 
time  let  these  foreigners  give  a  bond,  written  jointly  in  the 
foreign  and  Chinese  language,  making  a  declaration  to  this 
effect;  'That  their  vessels,  which  shall  hereafter  resort  hither, 
will  never  again  dare  to  bring  opium  with  them:  and  that, 
should  any  be  brought,  as  soon  as  discovery  shall  be  made  of  it, 
the  opium  shall  be  forfeited  to  government,  and  the  parties  shall 
suffer  extreme  penalties  of  law :  and  that  such  punishment  will 
be  willingly  submitted  to.'" 

3.  Morse,  Vol.  I,  ibid.,  p.  229. 

4.  Hertslet's  China  Treaties,  Vol.  I,  pp.  7-13. 

5.  The  treaty  was  abrogated  by  Article  1  of  the  Treaty  of 
Tientsin,  June  26,   1858,  and  embodied  in  the  subsequent  Treaty. 

6.  The  Convention  of  April  4,  1846,  Hertslet's  China  Treaties, 
Vol.  1,  pp.  15-16. 

7.  Agreement  of  April  6,  1847,  Hertslet,  17-18. 

8.  Morse,  op.  cit,  Vol.  I,  p.  396. 

9.  Ibid.,  p.  398.  Lord  Palmerston  to  Mr.  Bonham,  No.  68, 
August  18,  1849. 

10.  Meanwhile  the  Russians  in  the  North  were  making  ad- 
vances in  frontier  trade.  On  July  25th,  1851  (Hertslet,  Vol.  I, 
pp.  449-454,  No.  79),  the  Treaty  of  Kouldja  was  signed  between 
Russia  and  China  regulating  the  trade  between  Hi  and  Tarbagatai. 
The  appointment  of  consuls  was  provided  to  supervise  the  fron- 
tier trade.  The  disputes  were  to  be  decided  by  these  agents. 
The  frontier  commerce  was  to  be  freed  from  all  duties.  Ex- 
tradition of  criminals  was  provided.  Pasturages  were  to  be  al- 
loted  for  beasts  of  burden  of  Russian  merchants  and  to  be  kept 
by  them,  and  plots  of  ground  to  be  allotted  to  Russian  merchants 
to  build  their  houses  and  factories.  Two  sheep  out  of  every  ten 
imported  at  Hi  or  Tarbagatai  were  to  be  given  over  to  the 
Chinese  government  for  an  equivalent  in  cloth. 


THE  OPENING  OF  CHINA  17 

11.  Hertslet,  op.  cit,  p.  268,  Article  35,  Treaty  of  Whampoa, 
October  24,  1844;  also  Morse,  Vol.  I,  op.  cit.,  p.  414. 

12.  Article  8,  supplementary  treaty,  October  8,  1843,  State 
Papers,  Vol.  31,  p.  133. 

13.  Hertslet,  Article  28,  Treaty  of  1844,  p.  267. 

14.  Papers  relating  to  proceedings  of  H.  M.  naval  forces  at 
Canton,  October  to  December,  1856,  presented  to  both  Houses  of 
Parliament,  1857,  pp.  1-10.     Cf.  Morse,  Vol.  I,  op.  cit.,  p.  422. 

15.  While  the  war  was  proceeding  unfavorably  against  China, 
Russia  took  advantage  of  the  situation.  She  caused  China  to 
sign  the  Treaty  of  Aighoun  of  May  16,  1858.  (Hertslet,  op.  cit., 
454-5,  Xo.  80.)  The  boundaries  was  defined  along  the  course  of 
the  Amur  River.  "La  rive  gauche  du  flueve  Amour,  a  partir 
de  la  riviere  Argoun  jusqu'  a  l'enbouchure  de  I'Amour,  appar- 
tiendra  a  l'Empire  de  Russie,  et  Sa  rive  droite,  en  aval  jusqu' 
a  la  riviere  Oussouri,  appratitnera  a  l'Empire  Ta-Tsing;  lis 
territoires  et  endroits  situes  entre  la  riviere  Oussouri  et  la  mer, 
comme  jusqu'  a  pre  sent,  seront  possedis  en  common  par  l'Empire 
Ta-Tsing  et  l'Empire  de  Russie,  en  attendant  que  la  frontiere 
entre  les  deux  Etats  y  soit  reglee."  (Art.  1,  Hertslet,  op.  cit., 
p.  454.)  The  navigation  of  the  Amour,  Sungari,  and  Ussuri 
was  to  be  opened  onlv  to  the  Russian  and  Chinese  vessels. 

16.  Hertslet,  op.  cit.,  Vol.  I,  pp.  19-35,  No.  6. 

17.  Ibid.,  Vol.  I,  pp.  48-52,  287-291. 

18.  Morse,  op.  cit.,  Vol.  I,  p.  613. 

19.  Hertslet,  op.  cit.,  Vol.  I,  pp.  462-471,  Article  1. 

20.  The  civil  disputes  were  to  be  settled  amicably  by  the 
parties  themselves,  by  means  of  arbitrators  chosen  by  themselves 
and  with  the  help  and  cooperation  of  the  consuls  and  local 
authorities  (Article  8).  Criminal  cases  are  to  be  adjudged  ac- 
cording to  the  laws  of  their  own  country. 


II 

THE  LOSS  OF  DEPENDENCIES  (1860-1895) 

The  second  period  of  the  diplomatic  history  of  China 
dates  from  the  close  of  the  war  with  Great  Britain  and 
France  (1857-1860)  to  the  end  of  the  war  with  Japan 
(1894-1895),  covering  a  span  of  thirty-five  years.  It 
continues  the  first  period  in  that  it  carries  on  the  process 
of  the  opening  up  of  China,  which,  as  we  have  seen, 
was  the  chief  feature  of  the  first  peroid.  It,  however, 
has  its  own  distinctive  feature  which  differentiates  it 
from  the  first  period. 

This  distinctive  feature  is  the  gradual  loss  of  China's 
dependencies.  As  if  Western  aggression  worked  from 
outside,  the  opening  of  China  was  followed  by  the  loss 
of  her  dependencies ;  the  integrity  of  her  own  soil  was 
not  threatened  until  the  period  ensuing.  During  this 
period  China  lost  no  less  than  nine  dependencies, — the 
Liuchiu  Islands  to  Japan  in  1881,  the  Western  parts  of 
Hi  to  Russia  in  1881,  Tongkin  and  Annam  to  France  in 
1885,  Northern  Burma  to  Great  Britain  in  1886,  and 
Sikkim  to  the  same  in  1890,  and  Korea,  Formosa,  and 
the  Pescadores,  to  Japan  in   1895. 

As  I  have  said,  this  period  continues  the  first  period 
in  that  it  carries  on  the  process  of  the  opening  up  of 
China.  During  the  period  other  Western  nations  came 
into  treaty  relations  with  China.  To  the  list  of  the 
Treaty  powers,  which  hitherto  was  limited  only  to 
Great  Britain,  the  United  States,  France,  Russia,  Nor- 
way and  Sweden,  were  added  the  newcomers  which 
signed  their  treaties  of  friendship,  commerce  and  navi- 
gation. 

18 


THE  LOSS  OF  DEPENDENCIES  19 

Germany,  September  2,   1861. l  * 

Denmark,  July  13,  1863.2 

Netherlands,  October  6,  1863. 3 

Spain,  October  10,  1864.4t 

Belgium,  November  2,  1865. 6 

Italy,  October  26,  1855.7 

Austria-Hungary,  September  2,   1869.8 

Japan,   1872.9 

Peru,  June  26,  1874.10 

Brazil,  October  3,  1881. " 

Portugal,  December  1,  1887.12 1 

These  treaties  of  friendship,  commerce  and  navigation 
were,  in  general,  virtually  the  same  as  the  Treaty  of 
January  26,  1858,  signed  at  Tientsin  between  China  and 
Great  Britain,  which  had  served  as  the  model  for  sub- 
sequent commercial  treaties. 

Diplomatic  relations  between  China  and  the  Treaty 
powers  were,  and  remained,  for  the  first  half  of  this 
period  most  unsatisfactory.  The  Tsungli  Yamen,  sup- 
posed to  be  the  Foreign  Office,  was  not  organized 
as  were  the  other  departments  of  the  government,  but 
composed  of  the  leading  ministers  or  Grand  Secretaries 
of  the  Imperial  Court.  It  was  really  not  a  department, 
but  the  Cabinet  itself.  What  is  worse,  it  did  not  attend 
to  the  most  important  diplomatic  affairs.  It  often  re- 
ferred them  to  Li  Hung-chang,  the  viceroy  of  Chili,  who 
dominated  the  foreign  relations  of  China  throughout 
the  period.  It  was  he  that  negotiated  most  of  the 
treaties  and  conventions  of  this  period,  while  the 
Tsungli  Yamen  was  merely  the  office  of   record. 

Diplomatic    intercourse    was    again    hampered    by    the 

*  With  a  supplementary  commercial  convention  of  March  31, 
1880,  and  an  exchange  of  notes  on  the  same  date  regarding 
tonnage  dues. 

t  With  a  subsequent  convention  of  Nov.  17,  1877 a  regulating 
nigration  to  <  )uba. 

|  With  a  supplementary  convention  of  the  same  date  respecting 
the  opium  trade  of  Macao11  and  a  separate  agreement  of  the 
•ame  date  respecting  the  collection  of  duties  on  opium.14 


20     THE  DIPLOMATIC  HISTORY  OF  CHINA 

persistent  refusal  of  the  Imperial  Court  to  grant  an 
audience  with  the  Emperor,  whose  minority  was  offered 
as  the  excuse.  Thus,  the  foreign  ministers  remained  at 
Peking  with  their  credentials  undelivered.  And  it  was 
not  until  June  29,  1873,  when  the  Emperor  had  reached 
his  majority,  that  an  Imperial  audience  was  granted  for 
the  first  time. 

Diplomatic  intercourse  was  further  rendered  inade- 
quate by  the  absence  of  any  Chinese  ministers  resident 
abroad.  While  the  foreign  ministers  were  pounding  on 
the  doors  of  the  Tsungli  Yamen  for  proper  and  satis- 
factory relations  and  for  an  Imperial  audience,  the  Chi- 
nese Government  remained  ignorant  of  the  necessity  of 
despatching  ministers  abroad.  Thus,  China  was  de- 
prived of  adequate  means  of  diplomatic  intercourse  with 
other  states,  except  through  the  foreign  embassies  that 
had  made  their  residence  in  Peking.  And  the  situation 
was  not  corrected  until  late  in  1877  when  the  first  Chi- 
nese envoy,  Kuo  Sung-tao  was  sent  to  London.  A 
year  later  resident  ministers  were  established  in  most 
of  the  capitals  of  Europe  and  America. 

In  addition,  the  popular  feeling  of  the  Chinese  toward 
foreigners  was  yet  hostile.  They  felt  that  their  glorious 
isolation  was  annulled,  and  their  superiority  challenged 
by  the  Western  nations.  They  resented  the  enforced 
Occidental  intercourse,  and  therefore  their  feeling  was 
anything  but  friendly  toward  foreigners.  In  fact,  the 
hostile  feeling  increased  as  Western  aggression  increased. 
The  culmination  occurred  in  the  Boxer  Uprising  of 
1900,  when  the  Chinese  of  North  China  made  a  fa- 
natical endeavor  to  drive  the  "foreign  devils"  into  the  sea. 

During  this  period  one  notable  manifestation  of  this 
hostile  feeling  occurred,  namely,  the  Tientsin  Mas- 
sacre of  1870.  The  French  Catholic  missionaries  estab- 
lished an  orphanage  in  Tientsin  and  adopted  the  prac- 
tice  of   paying   any   one    who    delivered   to    the    asylum 


THE  LOSS  OF  DEPENDENCIES  21 

children  found  or  rescued  from  lack  of  parental  care. 
As  a  consequence,  some  evil-minded  Chinese  kidnaped 
well-to-do  children  and  brought  them  to  the  orphanage 
in  return  for  monetary  rewards.  Thus  rumors  became 
current  that  the  French  missionaries  were  sending  out 
agents  to  kidnap  Chinese  children. 

These  rumors  so  infuriated  the  Chinese  of  Tientsin 
that  on  June  21,  1870,  they  assembled  before  the  French 
Cathedral  and  demanded  redress.  The  French  Consul 
rushed  out  from  his  consulate  with  two  pistols  in  his 
hands  and  fired  at  the  magistrate  who  was  trying  his 
best  to  control  the  mob,  hitting  one  of  the  magistrate's 
servants.  This  made  the  mob  furious.  The  French 
Consul  was  surrounded  and  killed.  They  then  set  fire 
to  the  Cathedral  and  the  mission  and  killed  the  Sisters 
of   Mercy  within  the  asylum.15 

The  French  immediately  demanded  redress,  but  be- 
cause of  pre-occupation  with  the  Franco-Prussian  War 
of  1870,  they  did  not  resort  to  force  as  they  had  done 
in  1858-1860.  The  settlement  was  finally  arranged,  by 
which  the  Chinese  Government  was  to  pay  an  indemnity 
of  250,000  taels,  to  banish  the  prefect  and  magistrate 
to  Amur  for  life,  to  put  to  death  some  twenty  culprits 
and  to  send  a  mission  of  apology  to  Paris.16 

Another  instance  during  this  period  of  hostile  mani- 
festation toward  the  foreigner  was  the  murder  of  Mar- 
gary  in  1875.  Margary  was  a  British  consul  detailed 
to  assist  the  British  mission  of  investigation  that  was  to 
travel  from  British  India  to  Yunnan  through  Bhamo. 
While  on  his  way  to  meet  the  mission,  and  on  the  bor- 
der between  Yunnan  and  Burma,  he  and  his  Chinese 
associates  were  set  upon  by  the  untwined  tribes  of  the 
borderland  under  the  jurisdiction  of  China.  The  affair 
was  finally  amicably  settled  by  tin-  Chef OO  convention,17 
September  13,  1876,  signed  by  1  .i  Hung-chang  for  the 
part  of  China  and  Mr.  Thomas  F.  Wade  for  the  part 
of  Great  Britain.    The  convi  ntion  was  divided  into  three 


22     THE  DIPLOMATIC  HISTORY  OF  CHINA 

sections.  The  first  section  dealt  with  the  Yunnan  case. 
The  right  of  a  second  mission  from  India  to  Yunnan 
was  granted  (Article  4).  An  indemnity  of  200,000  taels 
was  to  be  paid  on  demand  (Article  5).  An  Imperial 
letter  of  regret  was  to  be  despatched  (Article  6).  The 
second  section  treated  of  official  intercourse  and  con- 
sular jurisdiction.  The  British  Supreme  Court  for 
China  and  the  Chinese  Mixed  Court  at  Shanghai  were 
recognized.  Judicial  proceedings  in  criminal  and  mixed 
cases  were  defined.  The  third  section  dealt  with  trade. 
Foreign  concessions  were  exempted  from  likin.  Ichang, 
Wuhu,  Wenchow  and  Pakhoi  were  to  be  opened  to 
trade.  Six  ports  of  call  were  to  be  opened  on  the 
Yangtze  River,  Tatung,  Nganking,  Hukou ,  Wusueh, 
Luchikou  and  Shashih.18  * 

The  one  redeeming  feature,  however,  of  this  period 
of  unsatisfactory  relation  was  the  Anson  Burlingame 
mission  to  the  Powers.  He  was  the  American  Minister 
in  Peking,  1862-1867.  When  he  was  about  to  retire 
from  office  in  November,  1867,  he  was  asked  to  head 
the  Chinese  Mission.  Urged  by  Sir  Robert  Hart,  who 
was  the  sponsor  of  the  Mission,20  he  accepted  the  ap- 
pointment and  went  abroad  on  behalf  of  China.  On 
arrival  in  the  United  States  he  toured  throughout  the 
country  with  his  magnetic  oratory,  depicting  China  as 
about  to  reform  and  take  on  the  new  garb  of  Western 
civilization.  At  Washington,  on  July  28,  1858,  he  signed 
the  Treaty  of  Washington,'-1  as  forming  additional  arti- 
cles to  the  Treaty  of  Commerce  between  the  United 
States  and  China,  June  18,  1858.  Free  emigration  into 
either  country  was  declared  to  be  "the  inherent  and  in- 
alienable right  of  man." 22  The  most  favored  nation 
treatment  with  respect  to  travel,  residence  and  education, 
except  the  privilege  of  naturalization,  was  reciprocally  ac- 
corded.23    From  the  United  States  he  proceeded  to  Eu- 

*  In  a  separate  article,  the  right  of  the  British  Mission  to 
Tibet  was  granted.19 


THE  LOSS  OF  DEPENDENCIES  23 

rope.  There  he  was  not  so  warmly  received,  nor  did 
he  succeed  in  concluding  any  further  treaties  with  Eu- 
ropean powers,  but  he  did  succeed,  in  a  reasonable 
measure,  in  enlisting  the  sympathy  of  the  west  for 
China,  and,  to  no  small  extent,  in  softening  the  European 
impetuosity  for  an  aggressive  policy  in  China.  His  un- 
timely death  at  St.  Petersburg,  however,  brought  his 
mission  to  an  abrupt  end. 

The  first  dependency  that  was  to  disappear  at  this 
period  from  among  the  satellites  of  the  Chinese  Empire 
was  the  Liuchiu  Islands.  It  was  done  in  such  a  subtle 
way  that  it  illustrates  almost  all  the  later  cases  of  the 
loss  of  China's  dependencies.  The  Liuchiu  Islands  first 
sent  tribute  to  China  in  1372  and  to  Japan  in  1451.  The 
Princes  of  the  Islands  had  received  investiture  of  office 
from  the  Emperor  of  China  since  the  reign  of  Yunglo 
(1403-1425).  In  1609,  however,  the  Islands  were  con- 
quered by  Prince  Katsuma  of  Japan,  and  from  that  date 
on  the  Princes  received  their  investiture  of  office  from 
both  China  and  Japan.  Thus,  the  Islands  remained 
under  the  joint  suzerainty  of  China  and  Japan.  In  1871 
an  incident  occurred  which  brought  the  question  to  the 
front.  Some  Liuchiu  sailors  were  shipwrecked  on  the 
coast  of  Formosa  and  were  cruelly  murdered  by  the  wild 
tribes  thereof.  The  Japanese  immediately  made  repre- 
sentation to  the  Peking  Imperial  Court  demanding  re- 
dress for  the  wrong.  Li  Hung-chang  was  inclined  to 
have  China  accept  tin-  responsibility  of  the  case,  but  the 
Tsungli  Yamen  decided  that  China  had  no  jurisdiction 
over  the  Eastern  half  of  Formosa— the  section  inhabited 
by  wild  triln^,  and  therefore,  declined  to  assume  the 
responsibility. 

Thereupon  Japan  took  advantage  of  the  decision,  ami 
fitted  out  an  expedition  in  1S74  to  Formosa  and  began 

to  punish  the  wild  tribes,  these  being  considered  as  out- 
side of  tlie  Chinese  jurisdiction.     This  bold  affront  the 


24     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Peking  Court  resented  and  demanded  that  Japan  should 
withdraw  her  forces  from  Formosa, — a  territory  belong- 
ing to  China, — and  supported  the  demand  by  the 
despatch  of  a  large  Chinese  army  to  Southern  Formosa. 
The  two  hostile  armies  stood  facing  each  other  on  the 
Island,  and  for  a  while  war  seemed  to  be  inevitable.  But 
through  the  friendly  mediation  of  the  British  Minister, 
a  settlement  was  finally  effected.  The  action  of  Japan 
was  justified;  Japan  pledged  to  withdraw;  China  agreed 
to  pay  an  indemnity  of  half  a  million  taels.  After  this 
settlement  the  Liuchiu  Prince  still  sent  tribute  missions 
to  the  Peking  Court,  against  which  the  Japanese  Min- 
ister entered  vigorous  protests.  In  1879  General  U.  S. 
Grant,  while  on  his  tour  around  the  world,  advised  that 
the  Liuchiu  Islands  be  partitioned  between  China  and 
Japan.  In  1881,  however,  the  Liuchiu  Islands  were 
definitely  recognized  as  being  under  the  suzerainty  of 
Japan.  Thus,  by  a  clever  maneuver  of  diplomacy,  Japan 
successfully  asserted  her  claim  of  sovereignty  over  the 
Liuchiu  Islands ;  and  thus,  through  sheer  ignorance  and 
incompetency,  China  lost  her  claim  of  suzerainty.  Com- 
menting on  this,  H.  B.  Morse  said : 

"More  significant  even  than  this  readiness  to  pay  was 
the  facile  abandonment  of  the  Liuchiu  Islands,  which 
had  paid  tributes  for  five  centuries — a  prelude  to  the 
successive  lopping  off  of  all  the  tributary  dependencies, 
one  after  the  other — Annam,  Korea,  Burma;  and,  more 
or  less   completed,   Manchuria,   Mongolia  and   Tibet."  25 

The  next  Chinese  dependency  to  bear  the  brunt  of 
Western  aggression  was  Hi,  a  part  of  the  great  north- 
western territory  of  China.  In  1866  a  series  of  rebel- 
lions broke  out  in  Hi  and  Kashgaria.  Out  of  the  tur- 
moil emerged  the  Conquerer  Yakub  Beg,  who  established 
his  rule  over  Kashgar  and  Yarkand.  Simultaneously 
the  Dungani  Tribe  rose  and  conquered  the  eastern  part 
of    the    northwestern    territory,    overran    the    Chinese 


THE  LOSS  OF  DEPENDENCIES  25 

province  of  Kansu  and  menaced  Shensi  and  Hupeh. 
In  1867,  Tso  Tsung-tang,  a  veteran  general  of  the 
Taiping  rebellion,  was  commissioned  to  pacify  the  re- 
gion. He  first  drove  back  the  Dungani  Tribe  from 
Hupeh  and  Shensi,  and  then  he  advanced  to  Kansu 
where  he  took  Suchow  after  a  continuous  seige  of  three 
years.  During  this  time  he  made  his  troops  grow  crops 
and  thus  fed  his  own  army.  Having  captured  Suchow, 
he  advanced  straight  on  and  conquered  city  after  city. 
By  1878,  he  had  the  entire  territory  pacified  and  brought 
under  the  control  of  the  Chinese  Government. 

Prior  to  this,  and  taking  advantage  of  the  rebellions, 
Russia  in  1871  moved  troops  into  Kuldja  and  occupied 
Hi,  promising  to  restore  the  territory  to  China  as  soon 
as  China  should  be  able  to  assume  the  functions  of  a 
territorial  sovereign.  So  when  Tso  Tsung-tang  had 
successfully  pacified  the  rebellions,  the  Chinese  Govern- 
ment demanded  the  restoration  of  Hi.  In  1879,  Chung- 
chow  was  sent  to  Russia,  and  there  he  negotiated  the 
treaty  of  Livadia,  signed  on  September  15,  1879.  The 
western  and  richer  part  of  Hi  was  to  be  ceded  to 
Russia.  The  strategic  passes  of  Tienshan  were  to  be 
also  surrendered  to  Russia.  Five  million  roubles  were, 
in  addition,  to  be  paid  for  the  restoration  of  the  rest  of 
Hi.26  "Such  conditions  might  be  imposed  after  defeat 
in  war,  but  never  granted  as  the  result  of  negotiations."  2T 
Chungchow  was  condemned  to  death  and  his  life  was 
saved  only  through  the  gracious  interposition  of  Queen 
Victoria. 

The  next  year,  1880,  Marquis  Tseng,  the  son  of  the 
illustrious  General  Tseng  Kuo-fan  of  the  Taiping  re- 
bellion, was  sent  to  Russia  to  open  the  negotiation  again 
for  the  restoration  of  Hi.  lie  succeeded  in  signing,  on 
February  24,  1881,  the  Treaty  of  St.  Petersburg,-"  with 
a  protocol-"  and  supplementary  regulations  for  inland 
trade.'1"  The  Chinese  authority  in  Hi  was  reestablished 
(Article  1)  31  but  the  western  part  of    Hi  was  ceded  to 


26     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Russia.32  The  Takkas  Valley  and  all  the  passes  between 
Hi  ami  Kashgaria  and  the  parts  of  Eastern  Turkestan, 
ceded  to  Russia  by  Chungchow,  were  all  regained,  Rus- 
sia still,  however,  retaining  the  western  part  of  Hi,  for- 
merly ceded  to  them  by  Chungchow.8'  The  Russians 
were  to  have  the  right  to  trade  in  Mongolia  and  Hi  free 
from  payment  of  duties,34  but  the  Russian  caravans  were 
to  stop  at  the  frontier  of  China  proper,  whereas  Chung- 
chow had  allowed  them  to  march  as  far  inland  as  Han- 
kow.35 An  increased  indemnity,  however,  of  nine  million 
roubles  was  to  be  paid.  Thus,  the  western  parts  of  Hi 
were  lost  to  Russia,  and  the  eastern  and  greater  part 
thereof  was  rescued  from  the  grasp  of  Russia  only  by 
the  diplomatic  genius  of  Marquis  Tseng,  and  martial 
zeal  of  General  Tso  Tsung-tang. 

The  third  dependency  that  was  to  pass  out  of  the 
control  of  China  was  Annam.  Annam  was  conquered 
by  China  and  became  a  vassal  during  the  Han  Dynasty. 
In  1407  it  was  again  conquered  by  Emperor  Yunglo 
of  the  Ming  Dynasty,  and  this  time  it  was  annexed  to 
China.  As  an  integral  part  of  the  Empire,  it  was  ad- 
ministered in  the  Chinese  manner.  It  was  divided  into 
fifteen  fus,  forty-one  chows,  and  two  hundred  and  eighty 
hsiens.36  But  twenty  years  later  it  reverted  to  the  old 
condition  of  a  vassal  state.  Ever  since  then,  there  had 
been  no  evidence  in  existence  that  it  had  failed  to  re- 
ceive the  investiture  of  its  King  from  China  or  send  a 
mission  of  tribute  once  in  four  years.37 

During  China's  second  war  with  Great  Britain  and 
her  French  ally,  Annam  began  to  break  away  from 
China.  In  1858,  France  and  Spain,  because  of  succes- 
sive murders  of  their  missionaries,  sent  an  expedition 
to  Annam.  The  war  that  ensued  continued  for  three 
years  and  a  half,  and  terminated  with  the  Treaty  of 
Saigon,  June  5,  1862.  Spain  was  to  receive  a  part  of 
the    indemnity    of    four    million    dollars;    and     France 


THE  LOSS  OF  DEPENDENCIES  27 

to    obtain    the   cession    of    Saigon,    three    provinces    of 
Cochin-China  and  the  Island  of  Pulo  Condor. 

The  next  step  in  the  alienation  of  Annam  from  China 
was  the  Treaty  of  Alliance  between  France  and  Annam 
concluded  on  March  15,  1874.  France  recognized  the 
complete  independence  of  Annam  and  pledged  to  pro- 
tect the  integrity  of  the  same.  Thus,  by  this  pretext, 
France  supplanted  China  as  overlord,  and  Annam 
changed  her  allegiance. 

The  last  step  in  the  control  of  Annam  was  the  estab- 
lishment of  the  French  protectorate  by  the  Treaty  of 
June  6,  1884.  Annam  recognized  and  accepted  the  pro- 
tectorate of  France.  France  controlled  the  relations  of 
all  foreign  Powers,  including  China,  with  the  Annamese 
Government. 3S  Cochin-China  was  to  be  enlarged.  Ton- 
kin was  to  be  administered  by  French  residents.  Annam 
was  still  to  be  under  the  Annamese  except  the  customs 
and  public  works.  The  Red  River  was  to  be  guarded 
by    French   military   posts. 

Having  thus  clinched  her  protectorate  over  Annam, 
France  saw  that  the  only  obstacle  standing  in  the  way 
of  the  complete  consummation  of  absorption  was  China. 
In  1881,  China  protested  through  Marquis  Tseng  at 
Paris  against  the  French  recognition  of  the  complete 
independence  of  Annam  and  asserted  her  claim  of 
suzerainty.  She  also  reenforced  her  protest  by  the 
despatch  of  Imperial  troops  who  cooperated  in  the  Red 
River  Basin  with  the  Black  Flags,  the  remnants  of  the 
Taiping  rebels,  who  had  been  guarding  the  Red  River 
ever  since  1873.  In  order  to  remove  this  obstacle,  France 
at  last  resorted  to  war.  On  March  15,  1883,  a  war 
credit  of  5,500,000  francs  was  voted  and  an  expedition 
was  thereafter  senl  to  the  Kci]  River.  Several  engage- 
ments took  place,  and  while  the  Chinese  made  a  stub- 
born stand,  the  French  were  at  last  successful  in  cap- 
turing  the   important    centers    of   the    Red    River,    Hanoi, 

Bontag  and  Bacninh. 


28     THE  DIPLOMATIC  HISTORY  OF  CHINA 

At  this  juncture,  and  in  order  to  avoid  further  blood- 
shed, the  convention  of  Tientsin  was  entered  upon,  .May 
11,  1884,  between  Li  Hung-chang  representing  China  and 
Commandant  Fournier  representing  France.89  France 
engaged  to  respect  and  protect  the  Chinese  frontiers 
bordering  on  Tonkin  (Article  1).  China  was  to  with- 
draw her  garrisons  from  Tonkin  and  to  respect  the 
treaties  between  France  and  Annam  (Article  2).  France 
was  to  renounce  her  demand  for  indemnity  (Article  3), 
but  in  return  was  to  receive  the  privilege  of  frontier 
trade  between  Annam  and  China  (Article  3). 

An  unfortunate  misunderstanding,  however,  soon  oc- 
curred, which  brought  on  the  war  between  France  and 
China.  Li  Hung-chang  and  Commandant  Fournier  had 
arranged  that  the  Chinese  Imperial  garrisons  should 
withdraw  from  the  Kwangsi  border  within  twenty  days, 
that  is,  by  June  6,  and  from  the  Yunnan  frontier  within 
forty  days,  that  is,  by  June  26,  but  the  French  advanced 
to  Langson  before  the  lapse  of  the  time  allowed  for 
evacuation  and  were  severely  repulsed  at  P.acle  by  the 
Chinese  garrisons  who  had  not  yet  received  instruction 
for  withdrawal. 

Thereupon  the  French  demanded  an  indemnity  of 
250,000,000  francs  but  later  reduced  the  amount  to 
80,000,000  francs.  In  July  Admiral  Courbet  sailed  with 
his  fleet  into  Foochow  Harbor  with  the  cordial  welcome 
of  the  Chinese  authorities,  but  on  August  23,  and  with- 
out previous  warning,  attacked  a  Chinese  fleet  lying  in 
the  same  harbor,  and  practically  annihilated  it.  The 
Chinese  Government  thereupon  declared  war.  On  sea 
France  was  victorious,  but  on  land  China  stood  her 
ground.  On  March  28,  1885,  the  Chinese  recaptured 
Langson. 

On  June  9,  1885,  the  treaty  of  peace  was  signed,  vir- 
tually reaffirming  the  convention  of  Tientsin  of  May  11, 
1884.*°  The  French  engaged  to  respect  the  Chinese 
southern    boundary   between    China   and    Tonkin    (Arti- 


THE  LOSS  OF  DEPENDENCIES  29 

cle  1).  China  agreed  to  respect  the  treaties  between 
Annam  and  France  (Article  2).  The  privilege  of  fron- 
tier trade  between  Tonkin  and  China  was  granted 
Article  5).  Trade  regulations  between  Tonkin  and 
Yunnan,  Kwangsi,  and  Kwangtung  were  to  be  made  by 
a  joint  commission  (Article  6).  China  was  to  ask 
France  for  assistance,  both  in  personnel  and  material, 
in  the  construction  of  railways  between  Tonkin  and 
Yunnan,  but  this  was  not  to  be  construed  as  to  give 
exclusive  right  in  favor  of  France   (Article  7).*1 

Closely  following  the  alienation  of  Annam  came  the 
loss  of  Burma,  a  vassal  state  conquered  by  the  Mongols 
during  the  reign  of  Kublai  Khan  in  1284  A.D.,42  and 
which  sent  missions  of  tribute  once  every  ten  years.  As 
early  as  1862,  Great  Britain  seized  lower  Burma  just 
at  the  time  when  France  seized  Cochin-China.  In  1886, 
one  year  after  the  French  occupancy  of  Annam  and  the 
subsequent  recognition  by  China  of  the  transfer  of 
suzerainty,  Great  Britain  completed  her  seizure  of  Up- 
per Burma  and  won  the  recognition  by  China  of  the 
British  rule  over  the  whole  of  Burma  by  the  convention 
signed  on  July  24,  1886.43  Burma  was  still  allowed  to 
send  her  decennial  tribute  mission  to  Peking,  Article 
l).44  China  recognized  British  authority  and  rule  in 
Burma :  "China  agrees  that,  in  all  matters  whatever  ap- 
pertaining to  the  authority  and  rule  which  England  is 
now  exercising  in  Burma,  England  shall  be  free  to  do 
whatever  she  deems   fit  and   proper."      Article  2).45 

In  1890  the  British  protectorate  over  Sikkim  was  rec- 
ognized by  the  convention  of  March  17,  1890.48  The 
boundary  between  Tibet  and  Sikkim  was  defined  (Ar- 
ticle 1 ).  The  British  protectorate  over  Sikkim  was  recog- 
nized by  China  (Article  2)  :  "It  is  admitted  that  the  Brit- 
ish Government,  whose  protectorate  over  the  Sikkim  State 
is  hereby  recognized,  has  direct  and  exclusive  control  over 
the  internal  administration  and   foreign  relations  of  that 


30     THE  DIPLOMATIC  HISTORY  OF  CHINA 

state,  and  except  through  and  with  the  permission  of 
the  British  Government,  neither  the  ruler  of  the  Slate 
nor  any  of  its  officers  shall  have  official  relations  of  any 
kind,  formal  or  informal,  with  any  other  country."  47 

The  last  group  of  dependencies  to  be  severed  from 
the  control  of  China  were  the  Pascadores,  For- 
mosa and  Korea.  Korea  was  a  vassal  state  of  China 
for  many  centuries.  In  1637  she  was  conquered  by  the 
Manchus.  Ever  since  then,  for  more  than  two  cen- 
turies the  relation  of  Korea  as  a  vassal  state  to  China 
had  never  been  questioned.  In  1876,  however,  Japan 
made  her  first  move  which  led  to  her  subsequent  control 
of  that  land.  She  covenanted  with  Korea  on  February 
26  of  that  year,  recognizing  the  full  independence  of 
Korea,  thus  ignoring  the  suzerainty  of  China.48  Arti- 
cle 1  read:  "Chosen  (Korea)  being  an  independent 
state,  enjoys  the  same  sovereign  rights  as  does  Japan."  49 
On  December  4,  1884,  a  violent  riot  broke  out.  The 
Chinese  Resident  General  Yuan  Shih-kai,  who  later  be- 
came President  of  China,  led  his  Chinese  troops  and 
proceeded  to  protect  the  Imperial  Palace  of  the  Korean 
Emperor,  but  upon  his  arrival  he  found  the  palace  oc- 
cupied by  Japanese  troops.  Thereupon,  Yuan  Shih-kai 
attacked  the  Japanese  guards.  A  general  commotion 
ensued,  amidst  which  the  Japanese  fought  their  way  out 
from  Seoul  to  Chemulpo,  where  they  boarded  a  Japa- 
nese steamer. 

To  settle  this  incident,  the  convention  of  Tientsin 
was  signed  on  April  18,  1885, 50  by  Li  Ilung-chang  rep- 
resenting China  and  by  Ito  representing  Japan.  Both 
agreed  to  withdraw  their  troops  from  Korea  within  four 
months.  The  Korean  King  was  to  be  asked  to  employ 
military  instructors  of  a  third  Power  to  drill  a  sufficient 
force  for  the  preservation  of  order  and  peace.  "In 
case  of  any  disturbance  of  a  grave  nature  occurring  in 
Korea    which    necessitates    the    respective    countries    or 


THE  LOSS  OF  DEPENDENCIES  31 

either  of  them  to  send  the  troops  to  Korea,  it  is  hereby 
understood  that  they  shall  give,  each  to  the  other,  pre- 
vious notice  in  writing  of  their  intention  so  to  do,  and 
that  after  the  matter  is  settled  they  shall  withdraw  their 
troops  and  not   further   station   them  there."  51 

In  March,  1894,  another  riot  broke  out  in  Korea  led 
by  the  Tonghaks, — a  Korean  political  party  with  the 
platforms  of  reform  and  expulsion  of  all  foreigners. 
"Down  with  the  Japanese  and  all  foreigners,"  was  one 
of  their  watchwords.52  During  the  same  month  another 
event  occurred  which  aggravated  the  situation.  One  of 
the  leaders  of  the  riot  of  December,  1884,  by  the  name 
of  Kin  Ok-Kim,  who  was  in  refuge  in  Japan,  was  de- 
coyed to  Shanghai  in  March,  1894,  and  there  treacher- 
ously murdered  by  a  Korean.  At  the  request  of  the 
Korean  King,  both  the  murdered  man  and  the  murderer 
were  conveyed  to  Korea,  where  the  former  was  desig- 
nated as  a  rebel  and  his  dead  body  decapitated  and 
quartered,  while  the  murderer  was  set  free  as  a  national 
Jiero. 

The  Korean  King  appealed  to  the  Peking  Court  for 
protection  and  help  in  the  face  of  the  Tonghak  rebellion 
and  the  general  excitement  over  the  murder  of  Kin 
Ok-Kim.  To  this  appeal  the  Chinese  Government  re- 
sponded by  the  despatch  of  troops  to  Korea.  In  com- 
pliance with  the  Treaty  of  Tientsin,  April  18,  1884, 
notice  was  given  to  Japan,  but  this  did  not  satisfy  Japan. 
She  charged  China  with  breach  of  faith  for  not  giving 
notice  before  the  despatch  of  troops,  though  she  herself 
sent  even  a  larger  body  of  soldiers.  Meanwhile,  the 
Tonghaks  had  been  put  down  by  Korean  soldiers.  Thus, 
although  the  cause  of  the  trouble  was  already  eliminated, 
the  two  hostile  armies  stood  face  to  face  in  Korea 
watching  each  other. 

China  suggested  a  simultaneous  withdrawal  of  troops 
and  a  mutual  refrainnunt  from  any  interference  in  the 
internal   administration   of    Korea,   to    which    Japan    ob- 


32      THE  DIPLOMATIC  HISTORY  OF  CHINA 

jected.  As  a  counter  move,  she  suggested  that  China 
should  cooperate  with  her  in  the  reform  of  the  internal 
administration  of  Korea,  from  which  China  dissented. 
Meanwhile  an  event  occurred  which  led  to  the  declara- 
tion of  war  on  both  sides.  A  British  steamer  by  the 
name  of  Kozvslicng  transported  Chinese  troops  to  Korea 
under  the  convoy  of  Chinese  cruisers  and  flying  a  British 
flag.  It  was  stopped  at  Prince  Jerome  Gulf  by  a  Japa- 
nese squadron.  Upon  examination  of  the  papers,  the 
Japanese  signaled  "follow  me,"  which  the  Chinese  troops 
on  board  the  ship  refused  to  obey.  The  Naniwa  then 
hoisted  the  red  flag  and  opened  fire.  The  Kozl'sIiciuj 
was  sunk  in  less  than  half  an  hour,  and  most  of  the 
Chinese  soldiers  on  board  were  drowned.  'War  was 
thereupon  declared  by  both  countries. 

Let  us  endeavor  to  find  the  real  motives  of  Japan 
which  brought  about  this  war.  China  had  already  con- 
sented to  withdraw  ;  the  Tonghaks  had  been  suppressed ; 
and  yet  Japan  still  refused  to  be  satisfied.  She  insisted 
that  China  should  cooperate  with  her  in  the  reforma- 
tion of  Korea,  when  it  was  an  open  question  as  to  the 
legal  and  ethical  rights  of  Japan  in  enforcing  reforms 
on  another  country.  The  real  motives,  as  we  find,  how- 
ever, appeared  to  be  that  Japan  wished  to  incite  a  war 
with  China  at  that  juncture,  so  that  she  could  achieve 
her  own  position  of  equality.  For  up  to  this  time  she 
had  been  making  desperate  endeavors  to  secure  the 
abrogation  of  extraterritoriality  and  tariff  restraint 
from  the  Treaty  Powers,  and  so  far  she  had  only  suc- 
ceeded in  gaining  the  consent  of  Great  Britain  on  June 
16,  1884.  She  needed  a  demonstration  of  her  military 
prowess  so  that  she  could  convince  the  rest  of  the 
Powers  that  she  was  entitled  to  a  complete  recovery 
of  her  judicial  and  tariff  autonomy.  Added  to  this  was 
the  motive  that  the  integrity  of  Korea  was  necessary 
for  the  safety  of  Japan.  In  fighting  lor  the  independ- 
ence of   Korea,  Japan  was  fighting  for  her  own   inde- 


THE  LOSS  OF  DEPENDENCIES  33 

pendence  and  integrity.     This  was  verified  by  the  testi- 
mony of  a  Japanese  diplomatic  representative  in  Europe: 

"This,  at  least,  I  can  tell  you  for  certain,  we  neither 
can  nor  will  Leave  Korea  again  until  our  aim  has  been 
obtained  in  one  way  or  another.  We  are  fighting  in 
Korea  for  our  own  future — I  might  also  say  for  our 
independence.  Once  let  Korea  fall  into  the  hands  of  a 
European  power,  and  our  independence  will  be  threat- 
ened." " 

The  victories  of  Japan  both  on  land  and  sea  are  known 
to  the  world.  The  war  was  finally  concluded  by  the 
Treaty  of  Shimonoseki,  signed  on  April  17,  1895. 54  The 
independence  of  Korea  was  fully  recognized  by  China 
(Article  1).  The  Liaotung  peninsula,  Formosa  and  the 
Pascadores  were  to  be  ceded  to  Japan  (Article  2).  An 
indemnity  of  200,000,000  Kuping  taels  was  to  be  paid 
(Article  4).  All  previous  treaties  between  China  and 
Japan  were  to  be  terminated  and  new  treaties,  based  on 
"the  treaties,  conventions  and  the  regulations  now  sub- 
sisting between  China  and  the  European  powers,"  were 
to  be  concluded  (Article  6).57  The  most  favored  nation 
treatment  was  to  be  accorded  to  Japan  and  her  subjects 
(Article  6).  Shashih,  Chung-King,  Soochow,  and  Hang- 
chow  were  to  be  opened  to  trade   (Article  6).M 

Hardly  had  the  treaty  of  Shimonoseki  been  made 
than  the  Three-Power  intervention  occurred.  Russia, 
Germany  and  France  each  presented  identical  notes, 
mutatis  mutandis,  to  the  Japanese  Government  advising 
the  latter  not  to  occupy  the  Liaotung  Peninsula  in  per- 
petuity. Consequently  the  convention  was  signed  on 
November  8,   '  For  the  retrocession  of   Liaotung, 

in   return   for   which   China  paid  an  additional   indemnity 
of  30,000,000  Kuping  tael>. 
A  year  later,  iii  pursuance  of  Article  6  of  the  Treaty 

of   Shimon.      hi  providing    for  the  annulment  of  all  pre- 
vious   treaties    between    (  hina    and    Japan    and    for    the 


34     THE  DIPLOMATIC  HISTORY  OF  CHINA 

conclusion  of  new  treaties,  a  treaty  of  commerce  and 
navigation  was  signed  on  July  21,  1896,  virtually  plac- 
ing [apan  on  a  par  with  the  other  treaty  Powers.  Con- 
sular jurisdiction  for  the  Japanese  subjects  was  provided 
(Articles  20,  21,  22). 00  The  most  favored  nation  treat- 
ment was  accorded  to  Japan  and  her  subjects  "in  all 
privileges,  immunities  and  advantages  that  may  have 
have  been  or  may  hereafter  be  granted  by  his  majesty 
the  Emperor  of  China  to  the  government  or  subjects 
of  any  other  nation"  (Article  25). 01  A  subsequent 
protocal  was  signed  at  Peking  on  October  19,  1896,  re- 
specting the  Japanese  settlements  in  the  newly  opened 
ports  and  also  other  matters.02 

This  concludes  the  second  period  of  the  diplomatic 
history  of  China.  In  recapitulation,  it  may  be  said  that 
it  witnessed  two  general  tendencies  or  forces  at  work. 
First,  it  witnessed  the  further  opening  of  China  which 
was  a  continuation  of  that  of  the  first  period.  Addi- 
tional' treaty  ports  were  opened  to  trade ;  more  commer- 
cial treaties  were  concluded  ;  and  other  Western  states 
arrived  to  enter  into  treaty  relations  with  China.  As  a 
reaction  against  this  unwelcome  intercourse  and  aggres- 
sion, hostile  feeling  was  engendered  among  the  Chinese 
which  manifested  itself  in  spasmodic  murders  of  mis- 
sionaries and  finally  culminated  in  the  Boxer  Uprising, 
which  we  shall  discuss  in  the  next  chapter.  Second, 
this  period  witnessed  the  initial  onslaught  of  Western 
aggression  resulting  in  the  loss,  on  the  part  of  China, 
of  a  large  number  of  her  dependencies.  It  witnessed 
the  loss  of  the  western  part  of  Hi  to  Russia,  of  Annam 
and  Tonkin  to  France,  of  Burma  and  Sikkim  to  Great 
Britain,  and  of  the  Liuchiu  Islands,  the  Pascadores,  For- 
mosa and  Korea  to  Japan.  The  attack  on  the  integrity 
of  China  did  not,  however,  occur  until  the  next  period 
when  we  shall  note  the  general  scramble  for  leases  and 
concessions. 


THE  LOSS  OF  DEPENDENCIES  35 


NOTES  TO  CHAPTER  II 

1.  Hertslet's  China  Treaties,  Vol.  1,  pp.  331-350. 

2.  Ibid.,  pp.  249-258. 

3.  Ibid.,  pp.  407-414. 

4.  [bid.,  pp.  512-522. 

5.  Ibid.,  pp.  S22-S27. 

6.  Ibid.,  pp.  223-234.  The  Belgians  were  granted  the  privilege 
of  trade  by  an  Imperial  letter  dated  July  25,  1845,  which,  how- 
ever, did  not  assume  a  treaty  form. 

7.  Ibid.,  pp.  354-361. 

8.  Ibid.,  pp.  215-223. 

9.  State  papers,  Vol.  62,  pp.  321-329. 

10.  Hertslet,  op.  cit.,  pp.  415-420.  With  a  special  agreement 
of  the  same  date  respecting  Chinese  immigrants  in  Peru 
(Hertslet,  Vol.  I,  pp.  420-422). 

11.  Ibid.,  pp.  234-240. 

12.  Ibid.,  pp.  423-434. 

13.  Ibid.,  pp.  434;435. 

14.  Ibid.,  pp.  435-436.  A  treaty  of  friendship,  commerce  and 
navigation  was  signed  between  Portugal  and  China  on  Aug. 
13,  1862,  but  it  was  not  ratified  because  of  the  dispute  over  the 
sovereignty  of  Macao — state  papers,  Vol.  55,  pp.  790-800;  Herts- 
let,  ibid.,  p.  422. 

15.  For  a  full  account  see  H.  B.  Morse,  The  International 
Relations  of  the  Chinese  Empire,  Vol.  II,  pp.  239-261. 

16.  Ibid.,  Vol.  II,  pp.  257-258. 

17.  Hertslet,  No.  12,  pp.  73-80. 

18.  Ibid.,  p.  77. 

19.  Also  see  No.  14,  pp.  84-88;  Hertslet,  No.  16,  pp.  90-91; 
No.  18,  pp.  94-96. 

20.  Morse,  op.  cit.,  Vol.  2,  p.  189. 

21.  Hertslet,  No.  96,  pp.  554-557. 

22.  Ibid.,  p.  556,  Art.  5. 

23.  II. id.,  pp.  556-557,  Arts.  6  and  7;  also  see  No.  97,  pp.  558- 
560,  Hertslet,  p.  561,  Art.  2;  p.  562,  Art.  4;  No.  99,  pp.  563-565; 
p.  563,  Art  1. 

25.  Morse,  <>p.  cit.,  VoL  II,  p.  275. 

2',.  [bid.,  Vol.  II,  p.  332. 

27.  Ibid.,  VoL  II,  p.  332. 

28.  State  papers,  Vol.  72,  pp.  1143-1150;  Hertslet  No.  85,  PP. 
483  I 

29.  State  papers,  Vol.  72,  pp.  1150-1151. 

30.  State  papers,  Vol.  72,  pp.  1151-1157. 

31.  Slate  papers,   Vol.  72,  p.   1144;    Hertslet,  p.  483,  Art.   1. 

32.  State  papers,  Vol.  72.  p.  1144;  Hertslet,  p.  484,  Art.  1. 

33.  Morse,  op.  cit,  Vol.  2,  p.  3, 

34.  Hertslet,  p.  488,  Art.  12. 

35.  Morse,  op.  cit.,  VoL  2,  p.  338. 


36     THE  DIPLOMATIC  HISTORY  (  >l-   CHINA 

36.  Ibid.,  Vol.  2,  p.  341. 

37.  Ibid.,  Vol.  2,  pp.  341-342. 

38.  [bid.,  Vol.  2,  p.  351. 

39.  Hertslet,  No.  44,  pp.  293-294. 

40.  Hertslet,  No.  46,  pp.  296-300. 

41.  Slate  papers,  Vol.  76,  p.  246,  et.  seq. 

42.  Encyclopaedia  Britannica,  11th  edition,  Vol.  4,  p.  843. 

43.  Hertslet,  No.  15,  pp.  88-90. 

44.  The  Burmese  sent  her  usual  mission  of  tribute  in  1895,  but 
after  that  year  the  tribute  missions  stopped. 

45.  The  boundary  between  Burmah  and  China  was  later  deter- 
mined by  a  subsequent  convention  of  March  1,  1894  (Hertslet, 
No.  20,  pp.  99-109).  Kulong  was  given  to  Great  Britain  and 
Kokang  to  China  (Art.  3).  Munglem  and  Kiang  Hung  were 
ceded  to  China,  for  which  China  pledged  not  to  alienate  them 
without  the  previous  consent  of  Great  Britain.  This  convention 
of  1894  was  modified  bv  a  subsequent  agreement  of  Feb.  4, 
1897  (Hertslet,  No.  22,  pp.  113-119),  bj  which  China,  in  con- 
sideration of  the  consent  of  the  British  Government  "to  waive 
its  objections  to  the  alienation  by  China,  by  the  Convention  with 
France  of  June  20,  1895,  of  the  territory  forming  a  portion  of 
Kiang  Huny"  (Hertslet,  Vol.  1.  p,  113),  was  to  compensate 
Great  Britain  by  territorial  cessions  including  the  State  of 
Kokang  and  perpetual  leases  of  certain  tracts  south  of  the 
Namwan  River.  The  non-cession  of  Munglem  and  Kiang  Hung 
without  the  previous  consent  of  Great  Britain  was  reiterated. 
A  special  article  opened,  as  treaty  ports,  Wuchow,  Sanshui  and 
Kong  Kun,  and  as  ports  of  call,  Kongmoon,  Komchuk,  Shuihing 
and  Takhing.  The  convention  of  September  6,  1894  (Hertslet, 
pp.  110-113)  affected  the  junction  of  the  Chinese  and  Burmese 
telegraph  lines. 

46.  Hertslet,  No.  17,  pp.  92-94. 

47.  To  this  convention  was  later  appended  a  set  of  regulations 
signed  on  Dec.  5,  1893.     Hertslet,  No.  19,  pp.  96-98. 

48.  State  papers,  Vol.  67,  pp.  530-533. 

49.  State  papers,  Vol.  67,  p.  531. 

50.  Hertslet,  No.  61,  pp.  361 -3o2. 

51.  State  papers,  Vol.  76,  pp.  297-298;  I  bit, let,  Vol.  I,  p.  362. 

52.  Morse,  op.  cit.,  Vol.  Ill,  p.  19. 

53.  Kolnischer  Xeitung,  July  25.  1894,  cited  in  North  China 
Herald,   Sept.  7,   1894,  quoted   in   Morse,  op.  cit.,   Vol.   III.  p.  29. 

54.  State  papers,  Vol.  87,  pp.  799-804;  Hertslet,  pp.  362-369, 
No.  62. 

57.  Hertslet,  p.  365,  Art.  6. 

58.  HertsKt,  pp.  368-369. 

59.  State  papers,  Vol.  87,  pp.  1195-1197;  Hertslet,  Vol.  I,  No. 
63,  pp.  37i»  373. 

Hertslet,  p.  379;  cf.  State  papers,  Vol.  62,  pp.  322  and  323, 
Art,.  8  and  1_'. 
'■1     Hertslet,  p.  381,  Art.  25. 
62.    Hertslet,  No.  65,  pp.  382-383. 


Ill 

THE  INTERNATIONAL  STRUGGLE  FOR 
CONCESSIONS   (1895-1911) 

The  third  period  of  the  diplomatic  history  of  China 
dates  from  the  close  of  the  Chino-Japanese  War  (  1895) 
to  the  beginning  of  the  Chinese  Revolution  (1911).  It 
is  a  period  characterized  by  the  international  struggle 
for  concessions.  The  first  period  (1689-1860),  as  we 
have  seen,  opened  China  to  the  trade  and  intercourse  of 
Western  nations.  The  second  period  (1860-1895),  while 
continuing  the  first  in  the  process  of  the  opening  of  China, 
was  chiefly  characterized  by  the  loss  of  dependencies. 
The  third  period,  which  is  our  present  theme,  witnessed 
the  international  struggle  for  concessions,  which  is  prob- 
ably the  most  interesting  in  our  study  of  the  foreign 
relations  of   China. 

The  last  period,  by  the  loss  of  her  dependencies,  had 
exposed  China  to  the  attacks  of  the  West.  For  centuries 
China  had  surrounded  herelf  with  a  cordon  of  depend- 
encies which  were  to  protect  her  from  assault  from  the 
outside  world.  But  now  a  large  number  of  these  depend- 
encies were  taken  away  and  China  was  exposed  to  the 
onslaught  of  Western  Powers. 

Further,  the  Chino-Japanese  War  revealed  to  the  world 
the  relative  incompetency  of  the  Chinese  Government. 
Hitherto  China  had  fought  with  Western  Powers,  and 
although  she  had  been  beaten  several  times,  she  was  nev- 
ertheless not  considered  so  weak  as  to  attract  the  un- 
scrupulous aggression  of  the  West.  In  fact,  during  the 
Chino-French  War  of  1884-1885,  the  Chinese  army  stood 

li'i    own    ground    very    well.      Put    the    war    with    Japan 
changed   the  opinion  of   the    world.     Japan   was  consid- 

37 


38     THE  DIPLOMATIC  HISTORY  OF  CHINA 

ered  a  secondary  power  in  Asia.  By  one  stroke  she 
brought  the  giant  to  the  ground.  This  was  a  victory 
of  one  Asiatic  state  over  another.  The  world  became 
convinced  that  China  was  following  in  the  wake  of  Africa 
and  that  the  nations  should  lose  no  time  in  taking  what 
they  could. 

Thus,  during  this  period,  China's  integrity  was  ex- 
posed to  Western  aggression,  first  by  the  loss  of  de- 
pendencies and  then  by  the  disastrous  defeat  suffered 
at  the  hand  of  Japan.  From  this  time  on.  until  checked 
by  the  Chinese  Revolution  of  1911,  the  diplomatic  his- 
tory of  China  was  marked  by  a  series  of  unscrupulous 
attacks  on  the  sovereignty  and  integrity  of  China.  And 
this  onslaught  could  not  but  produce  the  most  strenu- 
ous reaction  on  the  part  of  the  Chinese,  which  mani- 
fested itself  in  the  rise  of  Chinese  nationalism.  In 
its  first  blind  reaction,  it  took  the  form  of  the  Boxer 
Uprising,  by  which  the  Chinese,  and  especially  the 
Manchu  rulers,  thought  that  they  could  liberate  them- 
selves from  the  deadly  intrusions  of  the  West.  Find- 
ing this  impossible,  as  evidenced  in  the  disaster  of  1900, 
the  next  reaction  took  the  form  of  the  Chinese  Revo- 
lution of  1911,  by  which  the  Chinese  wrested  the  reins 
of  government  from  the  incompetent  hands  of  the  Man- 
chus  and  sought  to  find  shelter  in  their  own  republican 
form  of  government. 

Besides  Chinese  nationalism,  this  international  strug- 
gle for  concessions  brought  into  existence  another  con- 
dition of  affairs,  which  is  commonly  called  the  sphere 
of  interest  or  influence.  In  the  heat  of  contest,  the  ag- 
gressive states  carved  out  the  various  spheres  of  influ- 
ence for  themselves,  Russia  in  North  Manchuria  and 
Outer  Mongolia,  Japan  in  South  Manchuria  and  Inner 
Mongolia,  Germany  in  Shantung,  Great  Britain  in  the 
Yangtze  Valley,  Thibet  and  Szechuan,  France  in  Kwang- 
tung,  Kwangsi  and  Yunnan. 

And  to  create  these  spheres  of  influence  the  Powers  cm- 


THE  STRUGGLE  FOR  CONCESSIONS       39 

ployed  definite  means.  The  first  step  was  to  secure  a 
base,  from  which  to  radiate  their  forces  of  influence. 
After  this,  the  railroad  was  usually  employed  to  extend 
from  the  base  to  the  interior,  thus  dominating  the  eco- 
nomic life  of  the  sphere.  To  finance  the  railway,  min- 
ing, and  other  forms  of  economic  exploitation,  a  foreign 
bank  was  usually  established.  Thus  came  into  existence 
what  was  commonly  called  the  policy  of  conquest  by  rail- 
road and  bank.  And  in  order  to  avoid  international  con- 
flicts, the  powers  made  agreements  among  themselves 
that  they  would  respect  each  other's  spheres  of  influence. 

Having  seen  the  general  characteristics  of  the  period, 
let  us  now  return  to  the  point  where  we  left  off  at  the 
last  period,  that  is,  the  Chino- Japanese  War.  As  we 
have  seen,  this  war  imposed  on  China  an  indemnity  of 
230.000.000  taels  to  be  paid  in  seven  years  with  interest 
or  in  three  years  without  interest.  In  order  to  save  in- 
terest, the  Chinese  Government  strove  to  pay  off  the  in- 
demnity in  three  years.  To  this  end,  foreign  loans  were 
contracted,  and  here  we  first  witnessed  international 
rivalry  or  struggle.  France  and  Russia  obtained  in  1895 
the  concession  of  the  first  loan  of  400,000,000  francs.1 
This  excited  the  jealousy  of  Great  Britain,  who  feared 
that  the  success  of  the  Franco-Russian  diplomacy  would 
upset  the  balance  of  power  and  hurt  British  prestige. 
So  the  subsequent  loans  were  obtained  by  Great  Britain 
in  partnership  with  Germany. - 

As  we  recall,  the  retrocession  of  Liaotung  was  due  to 
the  tripartite   intervention   on   the   part    of    Russia,   Ger- 
many  and    France.     These   three   Powers   did   not    i 
neer  their   intervention  merely   for  the  of  China, 

but  rather  to  charge  the  account  of  service  to  the  Em- 
pire. On  June  20,  1895,  by  two  separate  conventions, 
France  obtained  a  delimitation  of  the  boundaries  be- 
tween Tonkin  and  China,  much  in  favor  of  France, 
including  the  alienation  of  a   pari   of   Kiang   Hung,1    for 


40     THE  DIPLOMATIC  HISTORY  OF  CHINA 

which  China  was  later  penalized  by  Great  Britain  by  the 
agreement  of  February  4,  1887, *  according  to  which 
China  lost  her  sovereign  rights  over  some  frontier  lands 
bordering  on  Burma.  France  also  secured  the  opening 
to  trade  of  Lungchow,  Mengtze,  Ho-Keou,ft  and  Szemao,0 
special  mining  privileges  in  Yunnan,  Kwangsi,  and 
Kwangtung,'  and  the  right  of  extension  of  the  Annum 
railway  into  China.8 

Russia  was  not  slow  in  exacting  her  share  of  reward. 
By  the  Convention  of  September  8,  1896,°  she  secured 
the  right  to  extend  the  Trans-Siberian  Railway  through 
Northern  Manchuria  to  Vladivostok,  thereby  obviating 
the  longer  and  more  expensive  route  of  running  along 
the  Amur  and  Ussuri  rivers,  earmarked  Kiaochou  and 
Port  Arthur  as  the  naval  bases  of  Russia,  and  obtained 
the  mining  privileges  in  Heilungkiang,  Kirin,  and  along 
the   Long   White   Mountain  Ranges. 

Germany  was  the  third  of  the  tripartite  Powers  that 
composed  the  Liaotung  intervention  of  1895.  She  waited 
for  her  chance  of  obtaining  her  reward.  When,  in  No- 
vember, 1897,  two  of  her  Catholic  priests  were  murdered 
in  Kiachwang,  Shantung,  she  immediately  seized  Kiao- 
chow  Bay  and  demanded  its  lease  besides  redress  for 
the  murder.  As  a  consequence  of  this  high-handed  ac- 
tion, the  ECiaochow  lease  convention  was  signed  on  March 
6,  1898.10  Under  Section  1  Kiaochau  was  leased  to  Ger- 
many for  ninety-nine  years  (Art.  2).  The  jurisdiction 
over  the  leased  territory  was  to  be  exercised  by  Germany 
(Art.  3).  A  neutral  zone  of  fifty  kilometers  was  pro- 
vided, in  which  Germany  was  to  have  the  right  of  free 
passage  of  her  army,  and  China  was  to  abstain  from 
taking  any  measures  without  the  previous  consent  of  the 
( r(  rman  Government.  Under  Section  2  Germany  ob- 
tained the  concessions  of  two  railways  in  Shangtung,  one 
to  run  from  Kiaochau  to  Chilian  and  the  Shantung  fron- 
tier, the  other  from  Kiaochau  to  I-Chou,  and  thence  past 


THE  STRUGGLE  FOR   CONCESSIONS       41 

Laiwuhsien  to  Chinan.  Under  Section  3  she  secured  the 
first  option  in  any  undertaking  in  which  foreign  assist- 
ance was  needed.10 

This  was  the  first  wanton  assault  on  the  sovereignty 
and  integrity  of  China.  By  the  doctrine  and  operation 
of  the  balance  of  power,  the  other  European  states  im- 
mediately followed  suit.  Russia  seized  Port  Arthur  and 
Talienwan  in  December,  1897,  and  later  demanded  the 
lease  thereof.  Consequently  the  agreement  was  signed  on 
on  March  27,  1898. u  Port  Arthur  and  Talienwan  were 
leased  to  Russia  (Art.  1)  for  a  term  of  twenty-five 
years,  with  the  privilege  of  the  renewal  (Art.  3).  The 
jurisdiction  of  the  leased  territory  for  the  term  of  the 
lease,  was  to  be  exercised  by  Russia  (Art.  4).  A  neutral 
territory  north  of  the  leasehold  was  to  be  provided,  in 
which  the  Chinese  Government  was  still  to  retain  its 
jurisdiction,  but  was  not  to  send  any  troops  except  with 
the  consent  of  Russia  (Art.  5).  Port  Arthur  was  to  be 
a  closed  port  (Art.  6),  which  only  Chinese  and  Russian 
vessels  were  allowed  to  use,  but  Talienwan,  with  the 
exception  of  a  part  reserved  like  Port  Arthur,  was  to 
be  an  open  port  (Art.  6).  The  right  of  extension  from 
a  point  in  the  Trans-Siberian  Railway  in  Northern  Man- 
churia to  a  point  in  Liaotung  Peninsula  was  granted  on 
the  same  principle  as  that  applied  in  the  grant  of  the 
Trans-Siberian  Railway  through  Northern  Manchuria  in 
1896.  Subsequently,  on  May  7,  1898,  an  additional 
agreement  between  China  and  Russia  was  signed  re- 
specting the  boundaries  of  Port  Arthur  and  Talienwan  1J 

and  defining  the  Russian  rights  in  the  neutral  zone. 

Following  upon  the  heels  of  Russia  came  1'" ranee.  She 
demanded  the  lease  of  Kwangchouwan,  the  right  t<>  build 
a  railway  from  Tonkin  to  Yunnan,  and  a  representative 
of  the  French  nationality  for  the  head  of  the  Chinese 
Post  (  Mtiee  staff.  By  an  exchange  of  notes  of  .April 
9/10,  1898,11  all  these  concessions  were  granted.  In  the 
draft  convention    for  the   lease   of    Kwangchouwan   of 


42     THE  DIPLOMATIC  HISTORY  OF  CHINA 

189S,11  the  lease  was  arranged  for  ninety-nine  years 
(Art.  1  )  ;  the  French  administration  of  the  leased  terri- 
tory was  conceded  (Art.  3);  the  right  of  fortification 
and  garrison  by  France  (Art.  4)  and  the  concession 
of  a  railmad  from  ECwangchouwan  to  Leichou  or  to  a 
point  in  the  neighborhood  thereof  (Art.  7)  were  also 
granted. 

Compelled  by  the  driving  force  of  the  balance  of 
power,  Great  Britain  could  not  stand  idle.  To  compen- 
sate for  the  damages  incurred  by  the  gains  of  the  other 
Powers,  Great  Britain  likewise  stretched  out  her  hands 
and  snatched  concessions  and  leases  necessary  for  self- 
defense  and  for  the  preservation  of  the  balance  of  power. 
On  February  4,  1897,  by  the  agreement  modifying  the 
Convention  of  1894  relative  to  the  boundaries  between 
Burma  and  China,  in  order  "to  waive  its  objections  to 
the  alienation  by  China,  by  the  Convention  with  France 
of  the  20th  of  June,  1895,  of  territory  forming  a  por- 
tion of  Kiang  Hung,  in  derogation  of  the  provisions  of 
the  Convention  between  Great  Britain  and  China  of  the 
1st  March,  1894,"  15  Great  Britain  secured  a  re-delimita- 
tion of  the  boundaries  between  Burma  and  China,  much 
to  the  favor  of  Great  Britain,  and  also  obtained  a  con- 
cession for  the  connection  of  the  Yunnan  and  Burmese 
Railway.10  By  the  Convention  of  June  9,  1898,  the 
territory  of  Hong  Kong  was  extended  to  include  Deep 
Bay  and  Llirs  Bay  and  the  lease  of  the  extension  was 
for  ninety-nine  years.17  Finally,  by  the  Convention  of 
July  1,  1898,18  Great  Britain  obtained  the  lease  of  Wei- 
haiwei,  "for  so  long  a  period  as  Port  Arthur  shall  re- 
main in  the  occupation  of  Russia." 10  "The  territory 
leased  shall  comprise  the  Island  of  Liu  Kung,  and  all 
the  islands  in  the  Bay  of  Weihaiwei,  and  a  belt  of  land 
ten  English  miles  wide  along  the  entire  coast  line  of 
the  Bay  of  Weihaiwei.  Within  the  above-mentioned  ter- 
ritory hased  Great  Britain  shall  have  the  sole  jurisdic- 
tion." 20     On  February  13,   1898,  Great  Britain  further 


THE  STRUGGLE  FOR   CONCESSIONS       43 

obtained  the  declaration  that  the  Inspector-general  of  the 
Maritime  Customs  should  be  a  British  subject  while 
British  trade  predominates.21 

Following  the  example  of  the  other  great  Powet 
Europe,  Italy,  in  February,  1899,  also  attempted  to  lease 
a  naval  base  in  China.  She  demanded  the  Sanmen  Bay 
in  Chekiang.  But  she  came  too  late.  The  control  of 
the  Peking  Court  had  already  changed  hands  from  the 
feeble  Emperor  Kwang  Hsu,  to  the  master  mind,  the 
Empress  Dowager,  Tse  Hsi.  The  latter  ordered  the 
Yangtze  viceroys  on  the  seacoast  to  make  preparations  to 
resist  with  force.  In  face  of  this  determined  resistance, 
Italy  withdrew  her  demands. 

In  addition  to  leases  and  concessions,  the  Powers  put 
in  the  prior  claims  on  their  various  spheres  of  influence 
by  means  of  the  declaration  of  non-alienation.  On  their 
face  these  declarations  were  nothing  more  than  mere 
utterances  from  a  territorial  sovereign  that  these  various 
spheres  of  influence  would  not  be  ceded  in  any  form 
to  any  power;  but  in  reality,  and  in  spirit,  the  Powers 
understood  them  to  mean  that,  by  receiving  these  pledges 
of  non-alienation,  they  had  a  prior  claim  to  their  respec- 
tive spheres  of  influence.  Accordingly,  France  obtained 
the  declaration  of  non-alienation  of  the  Island  of  Hainan 
on  .March  15,  1897."  Later,  on  April  10.  1898.  she 
secured  the  declaration  of  non-alienation  of  the  terri- 
tory bordering  on  Tonkin.-'1  Likewise,  on  February  11, 
1898,  Great  Britain  procured  the  declaration  of  non- 
alienation  of  the  Yangtze  Valley.84    On  April  26,  1898, 

Japan  received  a  declaration  concerning  the  non-aliena- 
tion of  Fukien.88  By  an  exchange  of  notes  annexed  to 
the  Treaty  of  May  25,  I'M 5,  respecting  the  Province  of 
Shantung,  Japan  also  secured  the  pledge  from  China 
that  "within  the  Province  of  Shantung  or  a '•  coasts 

no  territory  or  island  shall  he  1.  ased  or  c<  <1  :d  to  any  for- 
eign power  under  any  pretext."-"  By  the  I 'residential 
Mandate    of    May    13,     L915,81    and    in    response    to    the 


44     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Twenty  one  Demands  of  Japan,  China  made  the  declara- 
tion of  non-alienation  of  the  entire  coast  of  China. 

The  leases  and  declarations  of  non-alienation  having 
thus  been  obtained,  the  international  struggle  entered  into 
a  second  stage,  which,  though  not  so  dramatic  as  the 
first  violent  assaults,  was  nevertheless  animated  by  the 
same  spirit  of  international  rivalry  and  resulted  probably 
in  the  same  derogation,  though  in  a  much  milder  and 
safer  form,  of  Chinese  sovereignty.  The  foreign  strategic 
rail  loads  in  China  were  projected  by  the  three  powers 
composing  the  tripartite  Liaotung  intervention  of  1895. 
As  we  have  seen,  by  the  "Cassini"  Convention  of  1896, 
Russia  secured  the  right  for  the  Trans-Siberian  Railway 
to  cross  Northern  Manchuria  to  Vladivostok,  and  later 
by  the  Convention  for  the  lease  of  Port  Arthur  and 
Talienwan,  the  right  to  construct  a  line  connecting  a 
point  in  the  trans-northern  Manchurian  line  (Harbin), 
to  a  point  in  the  Liaotung  Peninsula.  By  the  Treaty 
of  June  20,  1895,  France  obtained  the  right  to  extend 
her  Annam  Railway  into  Chinese  territory,  which  was 
later  confirmed  by  an  exchange  of  notes  in  1898.  Like- 
wise, by  the  Kiaochou  Convention,  Germany  procured 
the  right  for  the  construction  of  two  railways  in  Shan- 
tung. All  these  are  foreign-owned  and  controlled  lines. 
As  a  compensation  for  the  overturn  of  the  balance  of 
power,  Greal  P>ritain  obtained  the  right  to  connect  the 
Burmese  Railway  with  the  Yunnan  Railway. 

These,  however,  were  but  the  beginning  of  the  inter- 
national scramble  for  railway  concessions  in  China.  Fol- 
lowing the  grant  of  these  strategic  railways,  the  com- 
mercial powers  all  contested  for  railway  concessions. 
The  most  crucial  struggle  was  over  the  Peking-Hankow 
line,  which  was  to  be  the  most  important  trunk  line, 
connecting  the  capital  of  China  with  the  heart  of  the 
i/e  Valley.  Great  Britain,  the  United  States,  and 
Belgium  (supported  by  France  and  Russia)  all  contested 


THE  STRUGGLE  FOR   CONCESSIONS       45 

for  this  premier  concession.  Finally  Belgium  underbid 
all  the  others  and  won  the  concession.28  Great  Britain 
was  most  chagrined  over  the  Belgian  success,  especially 
when  the  latter  was  supported  by  her  rivals,  Russia  and 
France,  and  so  she  demanded  a  series  of  concessions  in 
the  Yangtze  Valley,  partly  to  compensate  the  damage 
she  had  suffered  in  the  overturn  of  the  balance  of  power, 
and  partly  to  forestall  any  future  intrusion  of  railway 
enterprise  by  the  other  powers  into  the  Yangtze  Valley. 
By  a  vigorous  demand  and  naval  demonstration,  she 
procured  the  concessions :  the  Peking-Newchang,29  the 
southern  portion  of  Tientsin-Pukow,  the  Shanghai-Nan- 
king,30 the  Pukow-Hsinyang,  the  Soochow-Hangchow- 
Ningpo,  the  Kowloon-Canton  railways,  and  the  right  of 
extending  the  Burmese  Railway  as  far  as  the  Yangtze 
Valley,  besides  valuable  mining  rights  in  Shansi,*1  Ho- 
nan,82  Chekiang33  and  Chili.  Likewise,  as  a  compensa- 
tion, the  American  China  Development  Company  obtained 
the  concession  34  of  the  Hankow-Canton  Railway  with 
the  proviso  that  the  rights  should  not  be  transferred  to 
any  other  nationality  than  American.  Similarly,  Russia 
procured  the  concession  of  the  Chingting-Taiyuan,88  and 
France,  the  Lungchow-Nanning  and  the  Pakhoi-Nan- 
ning,36  and  Germany,  the  northern  section  of  the  Tientsin- 
Pukow  Railway. 

This  international  struggle  for  concessions  and  leases, 
as  we  have  just  seen,  could  not  but  call  forth  a  natural 
reaction ;  for  unless  this  process  of  spoliation  should  be 
stopped,  the  days  of  the  independence  of  China  would  In- 
numbered.  The  reaction  outside  of  China  came  from 
the  United  States,  which  had  successfully  forestalled  the 
extension  of  the  European  game  of  the  balance  of  power 
to  the  Western  Hemisphere  by  the  enunciation  of  the 
Monroe  Doctrine.  For  fear  that  the  operation  of  the 
European  balance  of  power  would  obliterate  China  from 
the  map,  and  to  prevent  any  further  aggravation  of  the 
various  spheres  of  influence,  John   I  lay  announced  the 


46     THE  DIPLOMATIC  HISTORY  OF  CHINA 

(  >]h  n  Door  doctrine  in  1899  by  a  circular  to  the  Powers,37 
first  to  England,  Germany  and  Russia  on  September  6, 
1899,  and  then  later  to  France,  Italy  and  Japan.  In  this 
circular  note.  John  Hay  set  forth  the  doctrine  of  equal 
opportunity  of  trade  in  China.  To  this  all  the  Powers 
addressed,  except  Russia,  who  made  a  more  or  less  in- 
definite reply,38  gave  their  assent.  Later,  in  1900,  when 
the  P>oxer  Uprising  imperiled  the  integrity  of  China,  John 
Hay  again,  on  July  3,  1900,  reaffirmed  the  principles  of 
the  Open  Door  policy,  but  this  time  he  openly  pro- 
claimed that  the  United  States  policy  in  China  was,  not 
only  to  maintain  the  equal  opportunity  of  trade,  but  also 
to  preserve  the  integrity  of  China.30 

The  reaction  within  China  first  took  the  form  of  the 
reform  in  1898.  Under  the  guidance  of  Kang  Yii-wei, 
Emperor  Kwang-Hsu  attempted  to  reform  China  by  pa- 
per edicts.  But  in  his  zeal  for  reform,  he  injured  the 
vested  interests  of  the  conservative  officials,  and  thus  the 
coup  de'etat  occurred  in  1898,  bringing  into  power  Em- 
press Dowager  Tse  Hsi.  With  the  reappearance  of  the 
latter  the  reaction  took  a  wrong  direction.  Bigoted  and 
anti-foreign,  she  turned  her  efforts  against  the  invasions 
of  the  Western  states,  and,  availing  herself  of  the  Boxer 
movement  then  on  foot  with  the  object  of  driving  out  all 
"foreign  devils,"  she  secretly  encouraged  the  Boxers  and 
thus  brought  to  pass  the  Uprising  of  1900. 

The  effects  of  this  Uprising  are  known  to  all  the  world. 
Having  violated  the  law  of  nations  in  an  attack  on  the 
foreign  legations,  China  stood  a  "criminal"  before  the  bar 
of  civilization.  Resumption  of  friendly  relations,  how- 
ever, was  finally  established  by  the  Protocol  of  Septem- 
ber 7,  1901.40  Therein  were  provided  reparations  for 
the  assassination  of  Baron  von  Kettlcr,  German  Minister 
al  Peking  (Art.  1),  and  of  M.  Suyiyama,  Chancellor  of 
the  Japanese  Legation  (Art.  3),  and  indemnity  of  450,- 
000,000  Haikuan  taels  to  be  repaid  in  thirty-nine  years 
at  four  per  cent  interest  and  secured  on  the  Chinese  Mari- 


THE  STRUGGLE  FOR  CONCESSIONS       47 

time  Customs,  Chinese  native  customs  in  the  open  ports, 
and  the  salt  Gabelle  (Art.  6),  the  improvement  of  Peiho 
and  Whangpoo  rivers  (Arts.  6  and  11),  the  rights  of 
an  exclusive  legation  quarter  and  of  the  stationing  of 
legation  guards  (Art.  7),  the  razing  of  the  Taku  forts 
(Art.  8),  the  abolition  of  the  Tsungli  Yamen,  and  the 
institution  of  a  regular  Foreign  Office  (Art.  12). 

In  pursuance  of  Article  6  of  the  Protocol  of  Septem- 
ber 7,  1901,  providing  for  the  raising  of  tariff  duties  to 
an  effective  five  percent  and  the  conversion  of  ad  valorem 
duties  to  specific  duties,  a  subsequent  agreement  was 
signed  on  August  29,  1902,  stipulating  new  rates  of 
tariff  in  accordance  with  the  average  prices  of  1897,  1898 
and  1899.41  Likewise,  in  pursuance  of  Art.  11  of  the 
Protocol  of  1901  providing  for  amendment  and  revision 
of  the  Treaty  of  Commerce  and  Navigation,42  Great 
Britain  and  China  entered  into  the  treaty  of  September 
5,  1902,  respecting  commercial  relations.  The  Likin  v. 
to  be  abolished,  and  the  Chinese  tariff  to  be  raised  to 
not  more  than  twelve  and  one-half  per  cent  on  imports 
and  seven  and  one-half  per  cent  on  exports  (Art.  8, 
Preamble),  provided,  however,  China  should  secure  the 
consent  of  the  other  states  enjoying,  or  who  may  enjoy, 
the  most  favored  nation  treatment  before  January  1, 
1904,  without  conceding  any  political  concession  or  any 
exclusive  commercial  concession. 4::A  Changsha,  Wanh- 
sien,  Nganking,  Waichow,  and  I  [ongmoon  were  to  be 
opened  to  trade  (Art.  8,  Sec.  12).  The  extraterritorial 
rights  were  to  be  surrendered  upon  the  satisfactory  re- 
form of  China's  judi  ial  system  (Art.  12).  Similarly, 
Japan  ent<  red  into  the  suppl(  mentary  treaty  of  commerce 
and  navigation  on  October  8,  1903,*8B  opening  Mukden 
and  Tatungkou  to  trade  (Art,  10),  and  providing  almost 
similar    stipulations    regarding    the    abolition    <>t    Likin 

(Art.    1;    and  e\l;  a  -ten  itorial   rights    (Art.    11)    as    found 

in  the    British  commercial   treaty   of    1902.      Likewise, 

the   United   States  entered   into  the  treaty  of   <  Ictober  8, 


48      THE  DIPLOMATIC  HISTORY  OF  CHINA 

1903,"  opening  Mukden  and  Antung  to  trade  (Art.  12) 
and  stipulating  similar  provisions  concerning  the  substi- 
tution of  tariff  surtax  for  the  abolition  of  Likin  (Art.  4) 
and  the  surrender  of  extraterritorial  rights  on  condition 
of  satisfactory  judicial  reform  (Art.  15). 

After  the  final  settlement  of  1901,  the  focus  of  atten- 
tion of  the  world  was  shifted  from  China  to  the  im- 
pending conflict  between  Russia  and  Japan.  From  the 
Boxer  Uprising  to  the  Russo-Japanese  War,  the  diplo- 
matic history  of  China  was  rather  quiet,  and  the  inter- 
national struggle  for  concessions  seemed  to  have  come  to 
an  end.  Although  there  were  a  few  minor  railway  con- 
cessions granted,  such  as  the  Cheng- Tai  Railway  to 
France  in  1902,  the  Kaifeng-1  [onan  Railroad  to  Belgium 
in  1903,  the  Taokow-Chinghua  Railroad  to  Great  Britain 
in  1905,45  and  the  Changchun-Kirin  Railway  to  Russia  in 
1902,48  the  center  of  interest  was  shifted  to  the  coming 
grapple  between  Russia  and  Japan.  Although  the  con- 
test was  between  two  foreign  powers,  yet  the  subject 
of  the  struggle  was  the  integrity  of  China  in  Manchuria 
and  the  definition  of  the  spheres  of  influence  in  China, 
and  for  this  reason  this  conflict  can  be  well  regarded 
as  a  vital  part  of  the  diplomatic  history  of  China. 

Taking  advantage  of  the  Boxer  Uprising,  Russia  oc- 
cupied Manchuria.  Her  troops  occupied  the  various 
strategic  points  in  Manchuria.  She  entered  Mukden  on 
October  2,  1900.  She  hoisted  her  flags  over  the  New- 
chang  Customs  House  on  August  4,  1900.  On  August  25 
she  declared  47  that  her  occupation  of  Manchuria  was  a 
mere  temporary  measure  of  military  necessity,  and  that 
as  soon  as  peace  and  order  should  be  restored  she  would 
withdraw  her  troops,  "provided  such  action  did  not  meet 
with  obstacles  caused  by  the  proceedings  of  other 
Powers."  *8 

When  the  Allied  forces  had  arrived  at  Peking  and  re- 
lieved the  beleaguered  legations,  Russia  pretended  to  be 


THE  STRUGGLE  FOR  CONCESSIONS       49 

the  best  friend  of  China :  she  proposed  that  the  Allied 
forces  and  agents  should  withdraw  from  Peking  to 
Tientsin  and  there  wait  for  negotiations.49  Her  proposal 
failing  to  receive  support,  she  then  attempted  to  con- 
clude a  separate  treaty  of  peace  with  China,  with  a 
view  to  making  Manchuria  her  exclusive  sphere  of  in- 
fluence, if  not  virtually  her  protectorate.  In  November, 
1900,  Admiral  Alexieff  made  an  agreement  with  the 
Tartar  General  Tseng  of  Mukden.50  by  which  the 
Province  of  Fengtien  was  to  be  disarmed,  its  mili- 
tary government  was  to  be  invested  in  Russian  hands, 
its  civil  government,  though  left  in  the  hands  of 
Chinese  officials,  was  yet  to  be  under  the  supervision 
of  a  Russian  political  resident  to  be  stationed  at 
Mukden.  Against  the  ratification  of  this  agreement, 
Japan,  Great  Britain,  Germany  and  the  United  States 
made  formal  representations  of  protest/'1  Because 
of  the  opposition  the  agreement  failed  to  obtain  the 
necessary  ratification.  Thereupon  Russia  made  a  fur- 
ther attempt  by  the  conclusion  of  what  was  known  as 
the  Lamdorff-Yangyu  Convention,0-  restricting  China's 
sovereign  rights  with  respect  to  armament  in  Manchuria, 
the  employment  of  foreign  instructors  other  than  Rus- 
sians to  drill  troops  in  North  China,  conceding  of  mining 
rights  and  the  construction  of  railways  in  Manchuria, 
Mongolia,  Tarbagatai,  Hi,  Kashgar,  Yarkand,  Khoten, 
etc.,  and  at  the  same  time  granting  to  Russia  a  railroad 
concession  from  a  point  in  the  Russian  Manchurian  line 
to  the  Great  Wall  in  the  direction  of  Peking.  As  against 
the  pressure  of  Russia  to  ratify  the  convention,  the  Em- 
peror of  China,  on  February  28,  appealed  to  Germany, 
Japan,  Great  Britain  and  the  United  States  for  mediation. 
In  response  vigorous  representations  were  made  caution- 
ing China  not  to  sign  the  convention.  Thus  the  second 
attempt  of   Russia  was  foiled. 

'otiations  continued.  Proposals  and  counter- 
proposals were  exchanged,  fa  addition  to  the  conven- 
tion, Russia  now  pressed  for  the  monopoly  of  the  indus- 


50     THE  DIPLOMATIC  HISTORY  OF  CHINA 

trial   development   of    Manchuria  to  be  granted  to  the 

Bank."      Against  the  monopoly,  John  Hay 

1      Likewise,    it    is    unnecessary    to   state    that 

Japan   and    Great    P.ritain   had   more  than  once  entered 

ous  protests  against  the  Russian  demands. 

While  the  negotiations  between  Russia  and  China  were 
thus  in  an  unsettled  state,  Japan  and  Great  Britain  con- 
clude! the  Anglo-Japanese  Alliance  on  January  30,  1902,55 
directed  mainly  against  the  aggressive  designs  of  Russia 
in  the  Far  East.  In  face  of  this  determined  opposition, 
Russia  quickly  changed  front  and  concluded  the  con- 
vention of  March  26,  1902/'°  pledging  to  restore  the 
Shanhaikwan-Ncwchang-Sinminting  Railway,  and  to 
complete  the  evacuation  of  Manchuria  in  three  succes- 
sive periods  of  six  months  each. 

When  the  specified  date  for  the  first  stage  of  evacua- 
tion came,  Russia  only  effected  a  nominal  withdrawal. 
She  of  course  left  the  parts  that  she  had  pledged  to 
evacuate,  but  she  concentrated  her  withdrawn  troops  in 
the  strategic  centers  of  Manchuria  where  she  was  still 
permitted  to  remain.  But  when  the  date  for  the  second 
stage  of  evacuation  came,  she  not  only  did  not  fulfill 
her  engagement,  but  she  shortly  after  presented  seven  ar- 
ticles as  conditions  of  further  evacuation,81  demanding, 
inter  alia,  the  non-alienation  of  Manchuria  and  the  clos- 
ing of  Manchuria  against  economic  enterprises  of  any 
other  nation  except  herself.  Thereupon  Japan,  Great 
Britain  and  the  United  States  again  made  vigorous  pro- 
tests. 

From  this  point  on,  Japan  stepped  into  the  shoes  of 
China  and  waged  a  diplomatic  duel  against  Russia,  lead- 
ing finally  to  the  Russo-Jaj  anese  War  of  1904-5.  On 
August  12,  1903,  Japan  presented  to  Russia  six  articles, 
as  a  basis  of  understanding,  among  which  she  demanded 

that  the  integrity  of  China  and  Korea  should  be  mutually 
respected,  and  that  reciprocal  recognition  of  Japan's  pre- 


THE  STRUGGLE  FOR  CONCESSIONS       51 

ponderate  influence  in  Korea  and  Russia's  special  inter- 
ests in  Manchuria  should  be  given."  As  counter- 
proposals, Russia  presented,  on  October  3,  1903,  eight 
articles.  She  proposed  to  respect  the  integrity  of  Korea, 
but  she  failed  to  mention  the  integrity  of  China  in  Man- 
churia, as  was  demanded  in  the  Japanese  proposals,  which 
revealed  most  clearly  the  true  intention  of  Russia.  She 
also  proposed  that  she  would  recognize  Japanese  pre- 
ponderating influence  in  Korea,  but  in  return  she  asked 
Japan  to  consider  Manchuria  as  outside  her  sphere  of 
influence.  In  addition  she  proposed  the  creation  of  a 
neutral  zone  north  of  the  thirty-ninth  parallel.59 

In  answer  to  the  Russian  counter-proposals,  Japan 
presented  to  Russia,  on  October  24,  1903,  the  irreducible 
minimum.  She  conceded  that  Manchuria  would  be  out- 
side of  her  sphere  of  influence,  and  also  the  creation  of 
a  neutral  zone  between  Korea  and  Manchuria,  but  she 
insisted  on  the  engagement  "to  respect  the  independence 
and  territorial  integrity  of  the  Chinese  and  Korean  em- 
pires." 60  The  Russian  note  in  reply,  on  December  11, 
1903,  virtually  reiterated  the  first  counter-proposals  of 
Russia  except  the  clauses  regarding  Manchuria  and 
Japan's  right  to  assist  Korea  in  the  latter's  reform,01  still 
omitting  any  mention  as  to  the  integrity  of  China  in  Man- 
churia. The  Japanese  reply  of  December  23,  1903,  re- 
emphasized  the  importance  of  coming  to  an  amicable 
understanding  as  to  where  the  interests  of  the  two  nations 
conflicted — Korea  and  Manchuria — and  also  suggested 
amendments  to  two  counter  proposals  of  Russia,  and  the 
cancellation  of  the  clause  for  the  establishment  of  a  neu- 
tral zone.'J  The  Russian  reply  of  January  <>,  1904,"  Still 
Omitted  any  mention  as  to  the  integrity  of  China,  but  in- 
sisted on  the  recognition  of  Manchuria  as  being  outside 
of  Japan's  sphere  of  influence  and  the  establishment  of 

a  neutral   zone.     Japan's   la>t   proposal   eanie  on  January 

13,  1904,"  refusing  to  agree  to  the  establishment  of  a 
neutral  zone,  but  conceding    Manchuria   to   be  outside 


52      THE  DIPLOMATIC  HISTORY  OF  CHINA 

o!  Japan's  sphere  of  influence,  but  this  only  on  condi- 
tion of  "an  engagement  on  the  part  of  Russia  to  respect 
the  territorial  integrity  of  China  in  Manchuria."  To 
this  last  proposal  of  Japan  Russia  made  no  reply.  Diplo- 
matic relations  were  thereupon  severed  and  war  was 
declared  by  both  sides. 

During  the  war  the  great  problem  of  China  was  to 
maintain  neutrality.  On  February  10,  1904,  John  Hay 
issued  a  circular  note  urging  the  belligerent  powers  to 
respect  the  neutrality  and  administrative  integrity  of 
China,  and  to  limit  their  activities  within  the  zone  of 
hostility.00  Later,  in  1905,  at  the  instance  of  the 
Kaiser,  William  II,  who  feared  that  the  Powers  might 
take  advantage  of  the  Russo-Japanese  War  to  seize 
China's  territory,  John  Flay  sent  out  the  circular  note  of 
January  13,  1905,66  requesting  that  in  the  final  negotia- 
tions between  Russia  and  Japan  no  claims  be  made  at 
the  expense  of  China's  territorial  integrity. 

The  war  was  concluded  by  the  Treaty  of  Portsmouth, 
September  5,  1905. 6T  Russia  recognized  the  paramount 
political,  military  and  economic  interests  of  Japan  in 
Korea  and  pledged  not  to  obstruct  any  measure  of  pro- 
tection and  control  which  Japan  might  take  in  Korea 
(Art.  2).  Russia  transferred  to  Japan,  with  the  consent 
of  China,  the  lease  of  Port  Arthur  and  Talienwan  and  the 
southern  half  of  the  Russian  Railway  from  Changchun 
to  Port  Arthur.  She  ceded  the  southern  half  of  Saghalien 
Island  to  Japan.  In  the  additional  articles,  the  with- 
drawal of  troops  from  Manchuria  was  arranged,  and  the 
railroad  guard  was  fixed  at  not  more  than  fifteen  per 
kilometer.  To  secure  China's  consent  to  the  transfer 
of  the  lease  of  Porth  Arthur  and  Talienwan  and  the 
southern  portion  of  the  Chinese  Eastern  Railway,  Japan 
concluded  the  Treaty  of  December  22,  1905,  with  China,68 
by  which  China  gave  her  consent  to  the  transfers  made 
by  Russia  to  Japan  by  the  treaty  of   Portsmouth.     In 


THE  STRUGGLE  FOR  CONCESSIONS       53 

the  additional  agreement  of  the  same  date,  the  conces- 
sion of  Antung-Mukden  Railway  was  granted  for  fifteen 
years  (Art.  6)  and  a  number  of  specified  places  in 
Manchuria  were  opened  to  trade  (Art.  1). 

The  victory  of  Japan  over  Russia  was  a  great  inspira- 
tion to  the  Chinese.  It  stirred  the  hearts  of  the  Chinese 
as  nothing  had  done.  It  convinced  them  that  an  Asiatic 
nation,  by  the  adoption  of  western  methods,  would  be 
capable  of  defeating  a  European  state.  Furthermore,  the 
fact  that  Japan,  so  much  smaller  and  less  endowed  by 
nature,  and  once  a  disciple  of  China,  should  be  able  to 
rise  to  such  eminence  in  world  politics,  drove  the  Chinese 
to  the  irresistible  conviction  that  they  could  likewise 
do  the  same  by  following  the  path  of  Japan.  Thus  the 
indirect  effect  of  the  Russo-Japanese  War  was  the 
strengthening  of  Chinese  nationalism. 

Shortly  after  the  Russo-Japanese  War,  the  interna- 
tional struggle  for  concessions  was  again  resumed.  As  if 
the  Boxer  Uprising  and  the  Russo-Japanese  War  had 
temporarily  suspended  the  international  rivalry,  the  new 
struggle  soon  commenced  again  after  the  settlement  of 
the  spheres  of  influence  between  Russia  and  Japan.  Fol- 
lowing the  law  of  historical  continuity,  the  first  stage 
of  the  resumed  struggle  was  to  complete  the  undertakings 
of  the  concessions  acquired  in  the  great  scramble  of  1898. 
Germany  and  Great  Britain  signed,  on  January  13,  1908, "9 
the  Tientsin-Pukow  loan  agreement,  and  later,  on  Sep- 
tember 28,  1910,70  a  supplementary  loan  agreement  for 
the  same  railway.  Great  Britain  signed  the  Canton- 
Kowlon  Railway  loan  agreement  on  March  7,  1907,"  the 
Shanghai-Hangchow-Ningpo  Railway  loan  agreement 
on  March  6,  1908,72  the  Peking-Hankow  Railway  re- 
demption loan  agreement  on  October  8,  1906,™  and 
another  loan  agreement  for  the  same  purpose  on 
August  1,  1910.74  The  Peking  Syndicate,  however,  sur- 
rendered its  mining  rights  in  Shansi  for  a  repayment  of 


54     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Rung  Pin  taels,  2,700,000,  by  the  agreement  of  Janu- 
ary 21,  1909." 

The  new  member  who  became  a  participant  in  the 
struggle  for  concessions  by  virtue  of  a  successful  war 
was  Japan.  She  was  comparatively  a  late  comer  in  this 
contest.  Ey  virtue  of  her  brilliant  victories  she  suc- 
ceeded to  the  southern  half  of  the  Chinese  Eastern 
Railway  from  Changchun  to  Port  Arthur  by  the  treaty 
of  Portsmouth,  September  5,  1905.  In  addition  she  now 
contested  other  railway  concessions.  For  the  Hsinmin- 
ting-Mukden  and  the  Changchun-Kirin  Railways,  she 
signed  successive  agreements,  first  on  April  15,  1907,78 
then  a  supplementary  loan  agreement  on  November  12, 

1908.77  then    two    detailed   agreements    on    August    18, 

1909.78  one  for  the  Hsinminting-Mukden  Railway  and 
the  other  for  the  Changchun-Kirin  Railway.  On  March 
27,  1907, 7;|  however,  Japan  transferred  the  Hsinminting- 
Mukden  Railway  to  the  control  of  China.  On  August  19, 
1919,80  she  also  signed  the  memorandum  regarding  the 
reconstruction  of  the  Antung-Mukden  Railway. 

The  United  States  seemed  to  be  the  only  power  that 
was  not  quite  so  successful  in  the  international  struggle 
for  concessions.  She  obtained  the  Canton-Hankow  Rail- 
way concession  in  1898  after  she  had  failed  to  secure 
the  Peking-Hankow  Railway.  In  the  supplementary 
ment  of  1900  it  was  stipulated  that  "the  object  of 
making  this  supplementary  agreemenl  of  equal  force  with 
the  original  agreement  is  to  permit  the  benefits  being 
transmissible  by  the  American  Company  to  their  suc- 
igns,  but  the  Americans  cannot  transfer  the 
rights  of  this  agreement  to  other  nations  or  people  of 
other  nationalities."81  But  the  American  China  Develop- 
ment Company  which  had  this  concession  allowed  the 
shares  for  the  Canton-Hankow  Railway  to  fall  into 
the  hands  of  the  Belgians  who  soon  acquired  a  con- 
trolling share  in  the  line  and  began  to  assume  the  di- 
rection of  the  work.    Thereupon  the  Chinese  Government 


THE  STRUGGLE  FOR  CONCESSIONS       55 

protested.  Finally  the  concession  was  cancelled  on  Au- 
gust 29,  1905,*2  by  the  payment  of  $6,750,000  gold,  which 
the  Chinese  Government  borrowed  from  the  Hongkong 
Colonial  Government  on  September  9,  1905.83 

Having  completed  the  agreements  for  the  concessions 
they  had  obtained  in  the  past,  they  now  entered  into  a 
contest  over  the  other  railway  concessions  which  had 
as  yet  not  been  appropriated.  The  struggle  of  this  sec- 
ond stage  centered  around  the  trunk  line  running  from 
Hankow  westward  to  Szechuan  and  southward  to  Can- 
ton.— commonly  known  as  the  Hukuang  Railway.  In 
securing  the  loan  from  the  Hongkong  Colonial  Gov- 
ernment for  the  redemption  of  the  Hankow-Canton  Rail- 
way concession,  Viceroy  Chang  Chi-tung,  in  his  letter  of 
September  9,  1905,  to  the  British  Consul  at  Hankow,  Mr. 
E.  H.  Fraser,84  promised  to  give  Great  Britain  the  first 
option  on  the  future  loan  for  the  Canton-Hankow  Rail- 
way, and  so  in  1909  when  the  construction  of  the  railway 
was  decided  upon,  Chang  Chi-tung  approached  the  British 
and  Chinese  Corporation  for  a  loan.  During  the  nego- 
tiation, the  British  insisted  on  the  Canton-Kowloon  terms, 
while  Viceroy  Chang  Chi-tung  insisted  on  the  Tientsin- 
Pukow  terms  which  were  much  more  favorable.  As  the 
British  would  not  accept  the  Tientsin-Pukow  terms, 
Chang  Chi-tung  broke  off  the  negotiations  and  turned 
to  a  German  syndicate  and  succeeded  in  signing  a  loan 
agreement.  Thereupon  the  British  charged  him  with 
breach  nf  faith  and  claimed  that  the  option  was  ofi 
not  to  any  one  British  syndicate,  but  rather  to  the  na- 
tion as  a  whole.  On  the  other  hand,  Chang  Chi-tung 
retorted  that  since  the  British  and  Chinese  Corpora- 
tion which  represented  the  British  Railway  enterprises 
in  China  would  not  take  the  concession  at  Tientsin- 
Pukow  terms,  he  was  no  more  hound  by  the  original 
pledge,  but  was  free  to  offer  the  concession  to  syndi- 
cates of  other  nationalities.  Accusations  and  recrimina- 
tion-, ensued     Finally  the  controversy  was  settled  at  the 


56     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Berlin  conference  of  bankers  when  the  British  capi- 
talists agreed  to  combine  with  the  French  and  the  Ger- 
mans  and  to  extend  the  concession  so  as  to  include  the 
1  lankow-Szechuan  Railway.  It  was  agreed  that  the 
French  and  the  English  should  construct  the  Hankow- 
Canton  line  under  a  British  engineer,  while  the  Germans 
should  construct  the  Hupeh  section  of  the  Hankow- 
Szechuan  line.  The  preliminary  agreement  with  China 
was  signed  on  June  6,  1909,85  for  a  loan  of  £5,500,000 
on  Tientsin-Pukow  terms. 

Four  days  after  the  conclusion  of  the  preliminary 
agreement,  the  United  States  protested.  She  claimed 
that  an  American  Syndicate  had  been  granted  the  right 
of  participation  in  the  Hankow-Szechuan  line  together 
with  the  British,  basing  her  claim  on  the  letter  from 
the  Chinese  Foreign  Office  to  Minister  Conger  dated 
August  15,  1903,86  and  also  the  letter  of  Prince  Ching 
to  Minister  Conger  dated  July  18,  1904."  Recalling, 
however,  the  experience  with  the  American  China  De- 
velopment Company  in  connection  with  the  Hankow- 
Canton  concession,  Chang  Chi-tung  refused  to  admit 
American  interests.  Finally  a  personal  cable  from  Presi- 
dent Taft  to  the  Prince  Regent  of  China,  on  July  15, 
1909,88  changed  the  attitude  of  the  Chinese  Government 
and  brought  American  interests  into  line  with  the  four- 
Power  group.  On  May  23,  1910,  the  four  Powers  en- 
tered into  an  agreement  at  a  conference  of  the  represen- 
tatives at  Paris,80  by  which  the  loan  was  increased  from 
£5,500,000  to  £6,000,000  to  be  shared  equally  by  the  four 
Powers.  Their  final  agreement  with  China  was  signed 
on  May  20,  191 1.90 

The  resumption  of  the  international  struggle  for  con- 
cessions, as  manifested  in  the  Hukuang  loan,  could  not 
but  produce  corresponding  reactions.  That  on  the  part 
of  the  United  States  was  the  neutralization  plan  of  Sec- 
retary Knox.    Having  secured  the  Chinchow  Aigun  con- 


THE  STRUGGLE  FOR  CONCESSIONS       57 

cession,91  he  proposed  to  the  powers  in  1909  92  the  neu- 
tralization of  all  the  Manchurian  railways.  According  to 
his  plan,  China  was  to  secure  a  large  international  loan 
from  the  powers  and  redeem  the  Chinese  Eastern  Rail- 
way and  the  South  Manchurian  Railway.  Thus  all  the 
railways  in  Manchuria  would  henceforth  belong  to  China, 
but  the  supervision  thereof  would  be  shared  or  con- 
trolled by  the  Powers  concerned.  In  other  words,  this 
neutralization  plan  was  a  concrete  assertion  and  appli- 
cation of  the  open  door  doctrine  in  relation  to  the  rail- 
ways of  Manchuria.  It  aimed  to  secure  the  equal  oppor- 
tunity of  trade  by  the  establishment  of  an  international 
syndicate  which  would  supervise  the  railways,  not  for 
the  sake  of  any  single  nation,  but  for  the  sake  of  all 
nations.  It  further  aimed  to  preserve  the  integrity  of 
China  by  vesting  the  property  rights  of  the  railways  in 
the  Chinese  Government.  China  and  Great  Britain  re- 
ceived the  proposal  with  favor,  but  Russia  and  Japan 
rejected  it.  Thus  failed  the  Knox  plan  of  neutralization. 
The  reaction  from  China,  as  provoked  by  the  resump- 
tion of  the  international  struggle  for  concessions,  was  the 
Chinese  Revolution  of  1911.  The  Chinese  spirit  of 
nationalism  having  been  stirred  to  its  depths  by  the  Japa- 
nese victory  over  Russia  in  1905,  the  people  could  not 
endure  any  longer  these  international  struggles  at  their 
expense.  Taking  lessons  from  the  painful  experience  of 
the  Boxer  Uprising  in  1900,  when  blinded  fury  led 
them  to  the  fanatical  attempt  to  expel  all  foreigners,  this 
time  they  wisely  turned  their  resentment  on  the  true 
source  of  their  weakness,  the  Manchu  Dynasty.  Realiz- 
ing that  Japan  had  forged  her  way  to  the  forefront 
through  the  establishment  of  a  strong  and  efficient  gov- 
ernment, they  also  believed  that,  by  taking  the  reins  of 
their  government  from  the  feeble  hands  of  the  Manchus, 
they  could  erect  a  government  of  their  own,  which  would 
shelter  them  henceforth  from  the  onslaughts  of  the 
West. 


58      THE  DIPLOMATIC  HISTORY  OF  CHINA 

With  this  deep  conviction  they  waited  for  the  mo- 
ment to  strike.  When  the  resumption  of  the  interna- 
tional struggle  for  concessions  manifested  itself  again 
in  the  i  [ukuang  Loan  negotiations,  the  people  with  their 
newly  aroused  nationalism  were  determined  to  put  a 
stop  to  this  spoliation  of  their  sovereign  rights  and  mort- 
gage of  their  heritage.  The  gentries  of  the  provinces 
affected — Hupeh,  Hunan,  and  Szechuan — made  the  coun- 
ter move  and  started  a  campaign  for  the  construction 
of  the  Hukuang  railways  by  the  people  themselves.  To 
this  end  they  raised  large  sums  of  capital  and  actually 
commenced  to  construct  the  lines.  The  conclusion  of 
the  Hukuang  loan  in  1911,  however,  dashed  to  pieces 
their  hopes  and  efforts,  and  imperiled  their  investment 
in  the  railways.  The  explosion  of  a  bomb  in  Wuchang 
on  October  10,  1911,  brought  the  situation  to  a  head 
and  heralded  the  advent  of  the  Chinese  Revolution,  which 
resulted  in  the  overthrow  of  the  Manchu  Dynasty  and 
the  establishment  of  the  Chinese  Republic. 

In  recapitulation,  we  may  say  that  this  period  was  one 
of  international  struggle  for  concessions.  The  first  great 
scramble  took  place  in  1898  and  the  second  in  1908- 
1911.  In  the  interval  between  the  two  acts  of  the  strug- 
gle was  the  conflict  between  Russia  and  Japan  in  1904- 
1905  over  the  integrity  of  China  in  Manchuria  and 
the  definition  of  their  respective  spheres  of  influence. 
The  reaction  on  the  part  of  the  United  States  to  the 
first  general  scramble  was  the  enunciation  of  the  Open 
Door  Doctrine  in  1899  and  1900,  and  to  the  second 
Btruggle  in  1908-1911  was  the  Knox  neutralization  plan. 
The  reaction  on  the  part  of  the  Chinese  to  the  first 
scramble  of  1898  was  the  fanatical  Boxer  Uprising  and 
to  the  second  act  of  the  international  struggle,  the  Chinese 
Revolution  of  1911.  During  this  period  we  may  also  say 
that  the  driving  factor  back  of  tin's  international  strug- 
gle for  concessions  was  the  national  greed  of  the  Powers 


THE  STRUGGLE  FOR  CONCESSIONS       59 

and  the  dynamic  force  of  the  European  balance  of  power. 
We  may  further  state  that  this  period  witnessed  the 
beginning1  of  the  foreign  loans,  that  put  China  on  the 
broad  and  dangerous  road,  which,  unless  checked  early  by 
popular  control,  would  inevitably  lead  China  to  the  preci- 
pice of  bankruptcy  and  foreign  control.  We  may  also 
add  that  this  period  witnessed  the  deepest  humiliation 
and  greatest  peril  that  China  had  ever  undergone.  As 
to  how  this  darkest  period  of  Chinese  diplomatic  his- 
tory was  gradually  changed  into  a  period  on  the  whole 
more  favorable  and  yet  in  some  respects  more  critical, 
it  will  be  seen  in  the  next  chapter.03 


NOTES  TO  CHAPTER  III 

1.  MacMurray,  Treaties  and  Agreements  with  and  concern- 
ing China,  1895/6;  ci.  F.  H.  Huang,  Public  Debts  in  China,  p.  21. 

2.  F.  H.  Huang,  ibid.,  pp.  22-23. 

3.  Hertslet's  China  Treaties,  Vol.  I,  No.  52,  pp.  321-323. 

4.  Ibid.,  No.  22,  pp.  113-119. 

5.  Art.  2,  ibid.,  p.  324. 

6.  Art.  3,  ibid.,  p.  324. 

7.  Art.  5,  ibid.,  p.  326. 

8.  Art  5,  ibid.,  p.  326. 

9.  MacMurray,  op.  cit.,  1896 

10.  Hertslet.  op.  cit.,  No.  59,  pp.  350-354;  also  Shantung  ques- 
tion, published  by  The  Chinese  National  Welfare  Society,  1920, 
p.  50. 

11.  !!■  it  let,  op.  cit,  \'.».  88,  pp.  505-508. 

12.  [bid.,  No.  89,  pp.  5 

13.  Ibid.,  No.  54,  pp.  327-328. 

14.  [bid.,  No.  55,  pp.  329-331. 

15.  Ibid.,  No.  22,  p.  113. 

16.  Ibid.,  No.  22,  pp.  113-110. 

17.  [bid.,  No.  24.  pp.  120-122. 
Ibid.,  No.  25,  pp.  122  123. 

19.  Ibid.,  No.  25,  p.  l 

20.  Ibid.,  p.  122. 

21.  Mar  Mn  '2. 

MacMurray,  1  I  8,  p.  Xi. 

2.1.    MacMurray,  1898/6;  Doc  Dip.  Chine,  1894  8,  p.  49. 

24.  MacMurray,  1 

25.  MacMurray,  1898/8. 
Shantung  op  cit,  p 


60     THE  DIPLOMATIC  HISTORY  OF  CHINA 

27.  MacMurrav,  1915/7. 

28.  MacMurray,  l.s(>s/13. 
MacMurray,  1898/20. 

30.  Mar  Murray,  1903/2. 

31.  MacMurray,   1908/2. 
MacMurray,  1898/12. 

33.  M.  C.  Hsu,  Railway  Problems  in  China,  pp.  41-44;  Sir 
MacDonald  to  Lord  Charles  Beresford,  British  Blue  Book,  Af- 
fairs of  China,  Xo.  1,  1899,  pp.  344-347. 

34.  Rockhill,  p.  273,  Art.  17. 

35.  MacMurray,  1902/8. 

36.  Hsu,  op.  cit.,  p.  40;  Sir  MacDonald  to  Lord  Charles 
Beresford,  British  Blue  Book,  Affairs  of  China,  No.  1,  1899,  pp. 
344-347. 

37.  U.  S.  For.  Rel.,  1899,  pp.  128-143. 

38.  U.  S.  For.  Rel.,  1899,  pp.  141-142,  Count  Mouravieff  to 
Tower. 

39.  U.  S.  For.  Rel.,  1900,  p.  299. 

40.  State  papers,  Vol.  94,  p.  686  et  seq. ;  U.  S.  For.  Rel.,  1901, 
Appendix,  Affairs  in  China,  French  text,  pp.  306-312,  English 
text.  312-318. 

41.  Hertslet,  No.  27,  pp.  148-170. 

42.  Hertslet,  No.  28,  pp.  171-188. 
43A.    Hertslet,  No.  66,  pp.  383-391. 

43B.    Art.  8,  Sec.  14,  Hertslet,  No.  28,  p.  180. 

44.  Hertslet,  X,).  100,  pp.  566-578. 

45.  W.  W.  Willouby,  For.  Rights  and  Interests  in  China,  Ap- 
pendix, p.  572. 

46.  MacMurray,  1907/3. 

47.  Asakawa,  Russo-Japanese  Conflict,  p.  151  ;  China,  No.  1, 
1901,  No.  256. 

48.  Ibid.,  p.  152;  China,  No.  1   (1901),  p.  113,  No.  256. 

49.  Morse,  The  International  Relations  of  the  Chinese  Em- 
pire, Vol.  3,  p.  305;  U.  S.  For.  Rel.,  1901,  Appendix,  p.  19. 

50.  Asakawa,  op.  cit.,  pp.  166-167;  China,  No.  2,  1904,  No.  5, 
Jan.  4,  1901. 

51.  Ibid.,  p.  169;  China,  No.  2,  1904,  No.  8;  No.  13;  No.  12; 
No.  19. 

52.  Ibid.,  p.  174;  The  Times,  February  28th,  1901,  p.  5;  China, 
No.  2,  1904,  No.  6,  No.  14.  Nos.  25  and  42. 

53.  [bid.,  p.  193;  U.  S.  For.  Rel.,  1902,  pp.  273-274. 

54.  U.  S.  For.  Rel.,  1902,  p.  275. 

55.  State  papers,  Vol.  95,  pp.  83-84. 

56.  Hertslet,  No.  90,  pp.  509-512. 

57.  Asakawa,  op.  cit.,  pp.  242-244 ;  China,  No.  2,  1904 ;  No.  94. 

58.  Ibid.,  pp.  303-304. 

59.  [bid.,  pp.  308-309. 

60.  [bid.,  pp.  324-325. 

61.  Ibid.,  pp.  328-329. 

62.  [bid.,  pp.  330-331. 

63.  Ibid.,  p.  333. 


THE  STRUGGLE  FOR  CONCESSIONS       61 

64.  Ibid.,  pp.  337-339. 

65.  U.  S.  For.  Rel.,  1904,  p.  118. 

66.  U.  S.  For.  Rel.,  1905,  p.  1. 

67.  State  Papers,  Vol.  98,  pp.  735-740;  MacMurray,  1905/8. 

68.  Hertslet,  No.  67,  pp.  391-396. 

69.  MacMurray,  1908/1. 

70.  MacMurray,  1910/4. 

71.  MacMurray,  1907/2. 

72.  MacMurray,  1908/3. 

73.  MacMurray,  1908/13. 

74.  MacMurray,  1908/13. 

75.  MacMurray,  1909/2. 

76.  MacMurray,  1907/3. 

77.  MacMurray,  1908/18. 

78.  MacMurray,  1909/6,  1909/7. 

79.  MacMurray,  1907/5. 

80.  MacMurray,  1909/8. 

81.  The  Canton-Hankow  Railway  Contracts,  Irving  Press,  N. 
Y.;  F.  H.  Huang,  p.  32. 

82.  MacMurray,  1905/7. 

83.  MacMurray,  1905/9. 

84.  MacMurray,  1905/9. 

85.  MacMurrav,  1911/5. 

86.  U.  S.  For.' Rel.,  1909,  pp.  155-157;  MacMurrav,  1911/5. 

87.  MacMurray,  1911/5. 

88.  U.  S.  For.  Rel.,  1909,  pp.  178-180. 

89.  U.  S.  For.  Rel.,  1910,  p.  280. 

90.  MacMurray,  1911/5. 

91.  MacMurray.  1909/12. 

92.  U.  S.  For.  Rel.,  1910,  p.  234  et  seq. 

93.  During  this  period  four  more  states  entered  into  treaty 
relations  with  China — Congo  Free  State,  1898;  Korea,  1899; 
Mexico,  1899;  Sweden,  1908. 


IV 

THE  INTERNATIONAL  COOPERATION  AND 
CONTROL  (1911 ) 

The  fourth  and  present  period  of  the  diplomatic  his- 
tory of  China  extends  from  the  close  of  the  Chinese 
Revolution.  It  is  a  period  in  which  a  radical  change  of 
policy  on  the  part  of  the  Powers  took  place.  While  in 
the  preceding  period  the  international  struggle  for  con- 
cessions was  the  policy  of  the  Powers,  in  this  period  the 
policy  of  international  cooperation  and  control  is  the 
predominant  note. 

This  radical  change  was  due  to  several  vital  reasons. 
The  first  was  the  unavoidable  disadvantage  of  interna- 
tional cut-throat  competition.  It  is  well  known  in  eco- 
nomic science  that  such  competition  leads  inevitably  to 
either  mutual  destruction  or  combination  and 
tion.  So  likewise  in  the  field  of  international  politics, 
the  same  law  holds  true.  International  cut-throat  com- 
petition must  inevitably  result  cither  in  mutual  destruc- 
tion of  one  another's  ends  or  in  international  combina- 
tion and  cooperation.  For  instance,  as  we  have  seen,  in 
the  case  of  the  Peking-Hankow  railway,  the  British,  the 
American  and  the  Belgian  capitalists  were  all  competi- 
tors, among  whom  the  British  were  especially  anxious  to 
win  the  premier  concession,  passing  as  it  does  from  the 
capit.al  of  China  to  the  heart  of  the  Yangtze  Valley;  but 
the  Belgian  capitalists,  supported  by  Russia  and  France, 
underbid  the  other  and  won  the  concession.  Again,  in 
the  case  of  the  Hankow-Canton  railway,  the  British 
capitalists,  although  holding  a  prior  option  by  virtue  of 
the  pledge  of  Viceroy  Chang  Chi-tung,  were  defeated  by 
German  capitalists  who  were  willing  to  accept  the  con- 

62 


COOPERATION  AND  CONTROL  63 

cession  on  the  Tientsin-Pukow  terms  which  the  British 
had  rejected.  It  was  because  of  the  painful  experience 
of  this  sort  that  the  Powers  began  to  realize  the  inex- 
pediency of  international  competition  and  favored  the 
policy  of  international  combination  and  cooperation. 

In  addition,  there  was  another  cause  for  the  radical 
change  of  the  policy  of  the  Powers  in  China,  and  that 
was  the  possible  occurrence  of  the  foreign  control  of 
China's  finance.  In  the  preceding  period  there  were  a 
few  foreign  loans  made  for  the  immediate  payment  of 
the  war  indemnity  to  Japan,  but  there  were  practically 
no  loans  made  that  were  of  an  administrative  character, 
most  of  the  loans  being  largely  for  railway  construction 
and  other  commercial  purposes.  But  with  the  advent 
of  the  Republic,  and  the  falling  off  of  provincial  reve- 
nues, which  either  were  diverted  to  provincial  uses  or 
failed  to  reach  Peking  on  account  of  the  relatively  inde- 
pendent position  of  the  military  governors  in  control  of  the 
provinces,  the  Peking  Government  was  forced  to  resort 
to  administrative  loans  for  the  purpose  of  meeting  ordi- 
nary non-productive  needs  of  the  government.  With  the 
coming  of  administrative  loans,  there  loomed  the  ghastly 
apparition  of  possible  and  probable  bankruptcy,  and 
hence  there  arose  the  possible  eventuality  of  foreign  con- 
trol of  China's  finance.  As  no  one  power  would  allow 
any  other  single  power  to  have  the  exclusive  control  of 
her  finances,  the  Powers  were  compelled  to  reach  the 
conclusion  that  they  must  combine  and  cooperate,  so 
that,  in  case  there  should  be  any  foreign  control  of  China's 
finance,  it  would  be  an  international  control  rather  than 
the  control  by  any  single  Power. 

Toward  the  close  of  the  preceding  period,  there  were 
a  few  instances  of  international  combination  and  coopera- 
tion, but  on  the  whole  they  were  not  the  results  of  de- 
liberate choice,  but  rather  the  consequences  of  inevitable 
circumstances.  For  instance,  the  Hukuang  railway  loan 
was  equally  shared  by  the  four  Powers — Great    Britain, 


64     THE  DIPLOMATIC  HISTORY  OF  CHINA 

the  United  States,  France  and  Germany — not  because 
they  were  willing  to  pool  their  interests,  but  rather  be- 
cause the  German  capitalists  had  underbid  the  British  and 
obtained  the  Hukuang  railway  concession,  and  there  was 
no  other  solution  of  the  tangled  situation  than  the 
common  sharing  of  the  concession,  which  was  effected 
by  the  Berlin  Conference  of  Bankers ;  and  the  United 
States  was  not  granted  participation  until  President  Taft 
threw  his  whole  personal  weight  of  influence  into  the 
diplomatic  controversy  by  cabling  a  personal  despatch 
to  the  Prince  Regent  of  China.  Thus  this  notable  in- 
stance of  international  combination  and  cooperation  was 
an  outcome  to  which  the  Powers  were  driven,  relunct- 
antly  but  inevitably,  by  the  force  of  circumstances. 

A  real  instance,  however,  of  international  combination 
and  cooperation,  commencing  at  the  close  of  the  pre- 
ceding period  and  extending  nevertheless  into  this  period, 
was  the  currency  reform  and  Manchuria  industrial  de- 
velopment loan.  The  loan  was  initiated  by  the  Chinese 
Government  and  first  offered  to  the  American  Banking 
Group.  The  preliminary  agreement  for  a  loan  of  $50, 
000,000  was  signed  by  this  Group  on  October  27, 
1910.1  But  the  United  States  Government  deemed  that 
such  a  gigantic  undertaking  as  the  currency  reform  and 
the  Manchurian  industrial  development  would  need  the 
sympathetic  cooperation  of  the  Powers  and  should  be 
shared  by  all  of  them  alike.  So  out  of  good  will  it  ex- 
tended an  invitation  to  the  other  Powers  to  join  in  the 
loan.  As  a  consequence,  France,  Germany,  Great  Britain 
and  the  United  States,  through  their  respective  financial 
agencies,  signed  the  agreement  on  April  15,  1921  ■  for 
a  loan  of  £10,000,000.  On  account  of  the  Revolution  of 
1911,  however,  the  loan  was  not  floated,  although  an 
advance  of  sterling  treasury  bills  amounting  to  the  value 
of  Shanghai  taels  3,100,000  was  delivered  for  the  urgent 
needs  of  the  Chinese  Government  on  March  9,  1912.1 

Thus  at  the  opening  of  the  present  period,  through  the 


COOPERATION  AND  CONTROL  65 

experiences  derived  from  the  Hukuang  Railway  loan  and 
the  currency  reform  and  Manchuria!!  industrial  develop- 
ment loan,  the  powers  had  already  learned  the  lesson  of 
the  advantages  of  international  combination  and  coopera- 
tion and  were  therefore  quite  ready  to  try  this  new  policy. 
And  the  instrument  through  which  the  policy  was  to  be 
put  into  effect  was  the  quadruple  syndicate  or  the  old 
consortium,  consisting  of  the  banking  groups  of  Great 
Britain,  France,  the  United  States  and  Germany,  which 
was  a  direct  product  of  the  Hukuang  and  the  currency 
loans.  To  this  quadruple  consortium  were  later  added 
Russia  and  Japan.  The  working  agreement  of  the 
sextuple  group  was  signed  on  June  18,  1912,4  at  the 
Interbank  Conference  of  Paris,  setting  forth  the  prin- 
ciple of  equal  participation  on  the  basis  of  complete 
equality. 

The  first  subject  the  consortium  was  to  deal  with  was 
the  reorganization  loan  of  £25,000,000.  Shortly  after  his 
assumption  of  office,  Yuan  Shih-Kai,  then  Provisional 
President  of  China,  commenced  the  negotiation  for  the 
loan.  On  making  a  request  for  a  preliminary  advance  of 
10,000,000  taels  for  administrative  purposes,  he  had 
promised  the  original  quadruple  group  that  he  would 
give  first  option  to  the  group  for  the  reorganization  loan, 
provided  their  terms  were  as  advantageous  as  those  of 
the  other  banking  groups.  But  when  the  negotiations 
started,  it  was  soon  found  that  the  terms  were  too  oner- 
ous. Pressed  by  immediate  needs,  a  small  Belgian  loan 
of  £1,000,000  was  concluded  on  March  14,  19 12,5  for 
which  service  preference  for  future  loans  was  pledged. 
The  conclusion  of  this  loan  called  forth  a  stormy  pro- 
test from  the  quadruple  group.  A.S  a  consequence,  the 
loan  was  canceled.  Thereupon  the  negotiation  for  the 
reorganization  loan  was  resumed,  and  meanwhile,  as  we 
have  seen,  Japan  and  Russia  were  admitted  to  the  con- 
sortium. 


66     THE  DIPLOMATIC  HISTORY  OF  CHINA 

During  the  negotiation,  it  was  soon  discovered  that 
the  Powers  concerned  aimed  to  secure  the  supervision  of 
China's  finance.8  To  this  China  vigorously  declined  to 
accede.  Later,  as  a  result  of  the  conference  of  the  hank- 
ing groups  at  London,  May  17-24,  the  Powers  demanded 
the  right  to  manage  the  loan  funds  for  five  years,  the 
foreign  supervision  of  salt  gabelle,  the  right  to  appoint 
a  foreign  representative  to  be  president  of  the  auditing 
bureau  and  to  appoint  a  financial  adviser  to  the  Chinese 
Government.7  To  these  proposals  the  Chinese  Govern- 
ment again  refused  to  give  its  assent.  A  deadlock  thus 
ensued. 

Pressed  once  more  by  urgent  needs,  China  again  turned 
to  other  sources  for  temporary  relief.  This  time  she 
o  included,  on  August  30,  1912,  with  an  independent 
British  Syndicate  (C.  Birch  Crisp  &  Co.)  8  for  a  loan  of 
£10,000,000,  for  which  preference  was  again  given  for 
future  loans,  provided  the  terms  were  equally  advan- 
tageous as  those  otherwise  obtainable.  The  conclusion 
of  this  loan,  commonly  called  the  Crisp  Loan,  once  more 
called  forth  the  protest  of  the  Powers,  in  consequence  of 
which  the  privilege  of  preference  was  withdrawn  and 
the  issue  of  the  second  half  of  the  loan  was  canceled  at 
a  compensation  of  £150,000.9A 

Thereafter  negotiation  were  again  resumed.  By  the 
end  of  January,  1913,  the  agreement  was  ready  for 
signature.  At  this  juncture,  fiance  and  Russia  made 
objections  to  the  appointment  of  foreign  advisers  sug- 
gested by  China.  A  shameless  wrangle  ensued.  The 
controversy  was  finally  settled  by  the  agreement  to  have 
a  Britisher  as  Inspector  of  the  Salt  Administration,  a 
German  as  director  of  the  National  Loan  Department, 
and  two  advisers,  one  French  and  the  other  Russian,  for 
Auditing  Bureau. 

During  the  time  when  the  Powers  were  scrambling 
over  the  appointments  of  advisers,  President  Wilson, 
conscious  of  the  precarious  nature  of  the  reorganization 


COOPERATION  AND  CONTROL  67 

loan,  withdrew  the  support  of  the  United  States  Gov- 
ernment from  the  American  banking  group,  and  issued  a 
proclamation  on  March  18,  1913,  announcing  that  as 
the  terms  of  the  reorganization  loan  touched  the  adminis- 
trative integrity  of  China,  the  United  States  could  not 
become  a  party  thereto.93  Consequently,  the  American 
group  withdrew  from  the  Sextuple  Consortium. 

The  final  agreement  was  signed  on  April  26,  191 3.10 
The  amount  of  the  loan  was  to  be  £25,000,000  (Art.  1). 
The  security  was  to  be  the  Chinese  Salt  Administration 
(Art.  4).  which  was  to  be  reorganized  under  foreign 
supervision  (Art.  5).  The  rate  of  interest  was  to  be 
five  percent  (Art.  8).  The  life  of  the  loan  was  to  be 
forty-seven  years  (Art.  9).  Redemption  after  a  lapse 
of  seventeen  years  and  up  to  the  end  of  the  thirty-second 
year  was  to  be  at  a  premium  of  two  and  one-half  per- 
cent, but  after  the  thirty-second  year  extra  redemption 
could  be  made  without  premium  (Art.  9).  In  reim- 
bursement of  expenses  connected  with  the  payment  of 
interest,  and  with  the  repayment  of  the  principal  of  the 
loan,  a  commission  of  one- fourth  of  one  percent  was  to 
be  paid  to  the  banks.  For  the  flotation  of  the  loan  a 
commission  of  six  percent  of  the  nominal  value  was  to 
be  granted.  The  issue  price  was  to  be  not  less  than 
ninety  percent  (Art.  13),  securing  to  China  a  net  price 
of  not  less  than  eighty-four  percent.  (  'hina  was  to  estab- 
lish an  account  and  audit  departmenl   (Art.  14).11 

After   the   conclusion   of    the    reorganization   loan   of 
1913,  the  policy  of  international  combination  and  coo 
tion  came  to  a   standstill.     This  was  due   to   two   main 
Causes.      The    first    was    the    withdrawal    of    the    United 

State-  which  inaugurated  this  policy  during  the  i 
tiation  of  the  currency  loan  and  was  it  i  real  champion. 
With  the  absence  of   the   United   States  there   was   no 
moral  leader  among  the  Powei  could  uphold  the 

doctrine  of  equal  opportunity  of   trade  and   the   i i it • 

of  China.     As  a  result,  the  other   Towers   fell  into  their 


68     THE  DIPLOMATIC  HISTORY  OF  CHINA 

old  practice  of  international  struggle  for  concessions. 
The  other  reason,  which  came  later,  was  the  Great  War 
in  Europe.  That  drew  away  the  contending  Powers  from 
the  concession  scramhle  in  China  to  the  battlefields  of 
Europe.  The  policy  of  international  combination  and 
cooperation  was  therefore  suspended  until  the  close  of 
the  Great  War,  when  the  Powers  instituted  the  New 
International  Banking  Consortum  and  came  back  to  China 
with  the  former  policy  of  international  combination  and 
cooperation. 

As  we  have  seen,  the  withdrawal  of  the  United  States 
left  the  other  Powers  without  a  moral  leader,  and  with- 
out an  earnest  champion  of  the  policy  of  international 
combination  and  cooperation.  As  we  have  also  seen,  the 
consequence  of  the  withdrawal  was  the  falling  off  of 
the  Powers  into  the  old  practice  of  international  strug- 
gle for  concessions.  In  pursuance  of  this  old  policy  of 
competition,  which  brought  on  the  Boxer  Uprising  of 
1900  and  the  Chinese  Revolution  of  1911,  the  Powers 
again  contended  for  concessions.  On  September  24,  1912, 
the  Belgian  Company,  Compagnie  Generale  de  Chemins 
de  Fer  et  de  Tramways  en  Chine,  secured  the  concession 
of  the  Lung-Tsing-U-Hai  Railway.12  On  December  12, 
1912.  the  supplementary  clause  was  signed,13  and  on  May 
1,  1920,  another  subsequent  agreement  for  the  loan  was 
entered  at  Brussels.14  On  July  22,  1913,  Belgium  and 
France,  through  their  respective  financial  agencies, 
jointly  obtained  the  concession  of  the  Tatung-Chengtu 
line.15  France  procured,  besides  the  five  percent  indus- 
trial gold  loan  of  1914, in  the  contract  for  the  L'hing-Yu 
Railway  on  January  21,  1914,17  and  the  pledge  of  the 
Chinese  Foreign  Office  regarding  preference  to  French 
nationals  in  railway  and  mining  enterprises  in  Kwangsi 
Province.18  Germany  acquired,  by  an  exchange  of  notes, 
<>n  December  31,  1913, ia  the  right  of  extending  the  Shan- 
tung Railway  from  Kaomi  to  Hanehuang  and  from 
Tsinan  to  Shunteh.20 


COOPERATION  AND  CONTROL  69 

Following  the  general  scramble,  Great  Britain  obtained 
on  Xovember  14,  191 3, "  the  contract  for  the  Pukow-Sin- 
yang  Railway;  on  December  18,  1913,  the  preliminary 
agreement  for  the  Shasi-Shingyi  Railway,-'-  and  on  July 
25,  1914,  the  final  agreement  for  the  same.23  On  March 
31,  1914,  she  also  obtained  the  Nanking-Hunan  Railway 
agreement,-4  and  on  August  24,  1914,  the  Nanchang- 
Chaochow  concession.2''  The  United  States  financial 
agents  also  obtained  concessions.  The  American  Inter- 
national Corporation  secured,  on  May  13,  1916, 2U  the 
agreement  for  the  Huai  River  Conservancy  Grand  Canal 
Improvement  Loan  agreement.27  The  Siems  and  Carey 
Company  obtained,  on  May  17,  1916,28  the  concession 
to  construct  1,500  miles  of  railways  in  China,  which  was 
later  reduced  by  the  supplementary  agreement  of  Sep- 
tember 29,  1916,  to  an  aggregate  of  1,100  miles. 

Likewise,  Japan  wrested  many  valuable  concessions 
from  China.  By  an  exchange  of  notes,  on  October  5, 
191 3, 29  she  secured  the  concession  from  Supingkai  via 
Chengchiatun  to  Taonanfu,  from  Kaiyuan  to  Hailung- 
cheng,  from  Changchun  to  Taonanfu.  By  the  treaty  of 
1915  relating  to  the  Province  of  Shantung,  she  also  pro- 
cured the  right  to  construct  a  railway  from  Chefoo  or 
Lungkow  to  a  point  on  the  Kiaochau-Tsinan  Railway. 
The  Japan  Advertiser  of  October  2,  1918,  announced  ad- 
ditional railway  loans  in  Manchuria  and  Mongolia, — 
from  Taonan  to  Jehol,  from  Kirin  to  Haiyuen  via  Ilai- 
lung,  from  a  point  mi  the  Taonan-Jehol  Railway  to  a 
seaport,  and  the  railway  loans  in  Shantung, — the  Tsinan- 
Shunteh  and  the  Kaonii-1  Isuchow  ;u  concluded  on  Sep- 
tember 24,  1918.  Under  the  Terauchi  Cabinet  there  were 
also  concluded  with  China  the  Communication  I  lank 
Loan,'12  the  Telegraph  Loan,"  the  Kirin-Hueining  Kail- 
way  Loan.  '  and  the  loan  of  yen,  30,000,000.  with  all  the 
forests  and  gold  mines  in  both  Kirin  and  I  [eilungkiang 
provinces  for  security.88 

Russia  was  the  onl\    greal    Power  during  this   period 


70      THE  DIPLOMATIC  HISTORY  OF  CHINA 

that  was  not  so  much  interested  in  the  international  strug- 
gle for  concessions.  What  railway  concession  her  finan- 
cial institutions  gained  in  this  period  was  the  Pin-Hei 
Railway  acquired  by  the  Russo-Asiatic  Bank  on  March 
27.  1916.:i°  The  interest  of  Russia  rather  lay  in  Mon- 
golia. Excepting  the  treaty  of  December  20.  1  Ml,37  fix- 
ing the  boundary  between  Russia  and  China  from  Tar- 
Dagh  to  Abahaitu,  and  along  the  Argun  River  to 
its  confluence  with  the  Amur  River  and  the  protocol  of 
delimitation  along  the  river  Horgos,  May  30-June  12, 
1915,  the  successive  treaties  she  made  with  China  dur- 
ing this  period  were  concerning  Mongolia.  On  Novem- 
ber 3,  1912,38  she  concluded  a  convention  with  Mongolia 
pledging  to  assist  the  latter  in  maintaining  its  regime  of 
autonomy  and  prohibiting  the  admission  of  Chinese  troops 
or  the  colonization  of  the  land  by  the  Chinese.  A  year 
later,  on  November  5,  1913,  she  concluded  a  convention 
with  China,""  exacting  the  recognition  of  the  autonomy  of 
Outer  Mongolia,  and  the  pledge  not  to  interfere  in  the 
internal  administration  of  Outer  Mongolia,  nor  to  send 
troops  thereto,  nor  to  colonize  the  territory.  Subse- 
quently, on  September  30,  1914,  Russia  again  entered 
into  an  agreement4"  with  Outer  Mongolia,  binding  the 
latter  to  consult  Russia  in  the  grant  of  railway  conces- 
sions to  other  nations.  To  complete  the  settlement  of 
the  relationship  between  Russia.  Outer  Mongolia  and 
China,  the  tripartite  agreement  was  concluded  on  June 
7,  1915.41  Outer  Mongolia  recognized  the  Sino-Russian 
(  "(invention  of  November  5.  1913  (Art.  1).  "Outer  Mon- 
golia recognizes  China's  suzerainty,  China  and  Russia 
recognize  the  autonomy  of  Outer  Mongolia  funning  part 
of  Chinese  territory"  (Art.  2).  "Autonomous  Mongolia 
has  no  right  to  conclude  international  treaties  with  for- 
eign |  ting  political  and  territorial  questions 
(Art.  3).  As  regards  questions  of  a  political  and  terri- 
torial nature  in  (  >uter  Mongolia,  the  Chinese  Govern- 
ment was  obligated  to  come  to  an  agreement  with  the 


COOPERATION  AND  CONTROL  71 

Russian  Government  through  negotiations,  in  which  the 
authorities  of  Outer  Mongolia  should  have  the  right  of 
participation  (Art.  3). 

Thus  the  international  struggle  for  concessions  was  re- 
vived after  the  withdrawal  of  the  United  States.  When, 
however,  the  World  War  broke  out,  the  struggle  came 
to  an  end.  Retiring  from  the  arena  of  Far  Eastern  poli- 
tics, the  Powers  turned  their  full  attention  to  the  death 
struggle  in  Europe,  thereby  relieving  China  temporarily 
from  the  aggressions  of  Europe. 

This  short  moment  of  alleviation,  however,  was  not 
to  last  long.  Left  alone  and  untrammeled  in  the  Far 
East,  and  with  China  lying  unprotected  and  almost  help- 
less before  her,  Japan  took  advantage  of  the  situation. 
She  realized  that  the  opportunity  of  a  thousand  years  had 
come  and  that  she  must  strike  while  the  iron  was  hot. 
Therefore,  on  the  pretense  of  the  Anglo-Japanese  Al- 
liance, she  entered  the  war  on  the  side  of  the  Allies. 
On  August  15,  1914,  she  presented  an  ultimatum  to  Ger- 
many, advising  the  latter  to  withdraw  immediately  all 
armed  vessels  from  Chinese  and  Japanese  waters,  and 
to  deliver  to  herself  the  leased  territory  of  Kiaochow, 
not  later  than  September  15,  "with  a  view  to  the  eventual 
restoration  of  the  same  to  China."  ,J  and  also  asking  for 
an  unconditional  acceptance  of  the  advice  by  noon  of 
August  23,  1914.  hailing  to  receive  a  reply  at  the  speci- 
fied time,  she  declared  war  on  Germany  on  August  23, 
1914. 

Thereupon  s  itched  her  forces  to  capture  Kiao- 

chow. On  September  3,  t<>  the  surprise  and  indignation 
of  the  e,  she  landed  her  troops  at  Lungkow  on  the 

northern  shop-  of  the  Shantung  Peninsula,  about  150 
miles  from  Kiaochow,  while  the  British  foi  perat- 

ing  in  the  campaign,  landed  on  September  23  at  Laoshan 
within  the  German  leasehold.    Confronted  by  the  evident 

violation  Of  her  neutrality  and   yet  unwilling  to  conic   to 


72     THE  DIPLOMATIC  HISTORY  OF  CHINA 

a  conflict  with  Japan,  China,  on  the  day  of  Japan's  land- 
ing at  Lunkow,  proclaimed  a  war  zone  covering  the  east- 
ern part  of  Shantung  Peninsula  as  t'ar  west  as  Weihsien, 
and  obligating  the  belligerents  to  observe  the  bounds  thus 

set  and  not  to  encroach  westward. 

But,  unexpectedly,  on  October  6,  the  Japanese  soldiers, 
despite  the  protest  of  the  Chinese  Government,  went  to 
Tsinan  and  seized  the  railway  station  there.  Having  oc- 
cupied the  entire  length  of  the  railway  from  Tsingtao  to 
Tsinan,  the  Japanese  distributed  soldiers  along  the  rail- 
road and  thus  gradually  displaced  all  the  Chinese  em- 
ployees of  the  railway.  They  also  seized  the  mining 
properties  of  the  Germans  along  the  railway  and  operated 
them  for  their  own  benefit. 

During  this  time  the  siege  of  Tsingtao  continued,  until 
September  7,  when  the  Germans  surrendered  the  city. 
As  the  capture  was  completed,  and  it  seemed  that  there 
was  no  more  necessity  for  the  Japanese  troops  to  remain 
in  Shantung,  the  Chinese  Government  asked  the  Japanese 
to  withdraw  from  the  Province  and  concentrate  their 
forces  at  Kiaochow.  This  the  Japanese  refused  to  do. 
As  a  next  step,  and  seeing  that  the  exigency  which  called 
forth  the  proclamation  prescribing  the  war  zone  had 
passed,  the  Chinese  Government  abrogated  the  declara- 
tion and  duly  notified  the  British  and  Japanese  on  Janu- 
ary 7,  1915,  to  that  effect.  To  this  note  the  Japanese 
Minister  replied  that  the  revocation  of  the  war  zone  was 
an  indication  of  want  of  international  faith  and  of  un- 
friendliness, and  that  the  Japanese  troops  in  Shantung 
would  not  be  bound  thereby. 

When  diplomatic  relations  were  thus  in  such  a  difficult 
pass,  the  Japanese  Minister,  to  the  dismay  of  the  Chinese 
Government,  presented  on  January  18,  1915,  the  now  fa- 
mous Twenty-one  Demands,  divided  into  five  groups. 
The  first  group  related  to  Shantung.  Japan  was  to  have  a 
railway  concession  from  Chefoo  or  Lungkow  to  join  the 


COOPERATION  AND  CONTROL  73 

Kiaochow-Tsinan  Railway,  the  opening  by  China  of  cer- 
tain commercial  ports  in  the  province,  the  pledge  by 
China  of  the  non-alienation  of  the  coast  or  territory  of 
Shantung,  and,  above  all,  the  assent  of  China  to  any  ar- 
rangement Japan  might  make  with  Germany  at  the  end 
of  the  war  relating  to  the  German  rights  in  Shantung.4:i 
The  second  group  dealt  with  South  Manchuria  and  East- 
ern Inner  Mongolia.  Japan  demanded  the  extension  to 
ninety-nine  years  of  the  lease  of  Port  Arthur  and  Dalny, 
and  the  South  Manchuria  Railway  and  the  Antung-Muk- 
den  Railway ;  the  right  to  lease  and  own  land  and  to 
open  mines  and  to  engage  in  any  business,  manufacturing 
and  farming;  the  requirement  of  the  consent  of  the  Jap- 
anese Government  to  the  pledging  of  the  local  taxes  as 
securities  for  any  railway  concession  to  a  third  Power 
and  to  the  employment  of  foreign  advisers ;  and  the 
transfer  to  Japan  of  the  management  and  control  of  the 
Kirin-Changchun  Railway  for  ninety-nine  years.44  The 
third  group  referred  to  the  Hanyehping  Company.  Japan 
demanded  joint  partnership  in  the  company  and  the 
monopoly  by  the  said  company  of  the  mines  located  in 
the  neighborhood  of  those  owned  by  the  company  .*■  The 
fourth  group  treated  of  the  non-alienation  of  the  coast 
of  China. 4,i  The  fifth  group,  which  was  the  climax,  de- 
manded the  employment  of  influential  Japanese  advis- 
ers; the  right  to  own  land  by  the  Japanese  hospitals, 
churches  and  schools  in  the  interior  of  China;  the  joint 
administration  by  Japanese  and  Chinese  of  the  police  al 
important  places  in  China  ;  the  purchase  of  a  fixed  amount 
of  ammunition  from  Japan  (say,  fifty  percent  or  mure), 
or  the  joint  establishment  of  an  arsenal  in  China;  rail- 
way concc-vinns  from  Wuchang  to  Kiuchang  and  Nan- 
chang,  from  Manchang  to  Eiangchow,  and  fnom  Nan- 
chang  to  Chaochou;  the  exclusive  right  of  the  economic 
development  of  Fukien;  and  the  right  of  Japanese  mis- 
sionary propaganda  in  China. 
The  negotiations  that  ensued  are  known  to  the  world, — 


74     THE  DIPLOMATIC  HISTORY  OF  CHINA 

the  Japanese  first  tried  to  conceal  the  demands  and 
•  1  the  Chinese  Government  t<>  an  immediate  accept- 
ance in  secrecy;  how  later,  a^  the  news  of  the  demands 
leaked  out,  the  Japanese  denied  their  existence  and  pre- 
sented to  the  world  only  eleven  articles,  omitting  the  most 
important,  including  Group  V.';  As  negotiations  lagged, 
on  April  26,  1915,  Japan  presented  her  revised  demands  in 
Twenty-four  Articles.  In  the  first  group,  relating  to 
Shantung,  there  was  practically  no  change  except  the 
demand  of  its  non-alienation,  which  was  changed  to  an 
exchange  of  notes.'8  In  the  second  group  respecting 
South  Manchuria  and  Eastern  Inner  Mongolia,  the  two 
regions,  which  had  been  treated  alike  in  the  original  de- 
mands, were  now  differentiated.  In  South  Manchuria, 
all  the  rights  and  concessions,  as  demanded  originally, 
were  still  pressed,  except  the  right  of  land  ownership, 
which  was  omitted,  and  the  right  of  inland  travel  and 
residence  which  was  regulated  by  the  existing  and  pre- 
vailing rules  of  extraterritorial  jurisdiction  in  China.  In 
other  words,  subject  to  certain  limitations,  all  of  South 
Manchuria  was  to  be  opened  to  the  Japanese.  In  East- 
ern Inner  Mongolia,  whose  status  was  originally  placed 
on  a  par  with  South  Manchuria,  only  an  exclusive  sphere 
of  Japanese  influence  was  now  demanded.  The  granting 
of  railway  concessions  and  the  pledging  of  local  taxes 
as  securities  still  required  the  consent  of  Japan,  and  the 
opening  of  certain  commercial  ports  to  the  resideno 
trade  of  Japanese  with  the  privilege  of  agricultural  and 
industrial   pursuits   was   still   demand,  In   the   third 

group  dealing  with  the  Hanyehping  Company,  the  joint 
partnership  was  still  demanded,  but  the  demand  for  the 
monopoly  of  the  mines  in  the  neighborhood  of  those 
owned  by  the  company  was  abandoned;  but  the  limita- 
tions of  non-conversion  into  a  Slate  enterprise  or  of  con- 
tion  and  the  prohibition  of  the  use  of  any  other  for- 
eign capital  than  the  Japanese  were  added. '"  The  fourth 
group  treating  of  the  non-alienation  of  China's  coast  was 


COOPERATION  AND  CONTROL  75 

changed  to  a  voluntary  pronouncement  on  the  part  of 
the  Chinese  Government. 

In  the  fifth  group  respecting  the  political,  military  and 
financial  control  of  China,  all  the  previous  demands,  in 
one  form  or  another,  were  still  pressed  with  certain  ex- 
ceptions. The  one  on  the  joint  administration  of  police 
in  important  places  of  China  was  dropped.  The  one  on 
the  right  of  land  owning  hy  the  Japanese  for  the  pur- 
pose of  establishing  hospitals,  schools  and  churches  was 
modified  to  the  extent  that  the  right  of  land-owning  was 
changed  to  the  right  to  purchase  and  lease  land,  and 
that  the  right  to  esablish  churches  in  the  interior  of 
China  was  omitted.  The  one  on  the  railway  concessions 
in  the  Yangtze  Valley  was  modified  only  by  the  self- 
denying  limitation  that  there  should  be  no  objection  from 
the  Power  interested  in  these  concessions,  meaning,  of 
course,  Great  Britain,  and  by  the  prohibition  not  to  grant 
these  concessions  by  China  to  any  foreign  Power,  "before 
Japan  comes  to  an  understanding  with  the  other  Power 
which  is  heretofore  interested  therein."  The  one  on  Fu- 
kien  was  changed  from  a  demand  for  an  exclusive  Japan- 
ese sphere  of  interest  to  a  prohibition  of  the  construc- 
tion by  any  foreign  Power  of  any  naval  and  military 
base,  and  the  use  of  foreign  capital  for  the  construction 
of  the  same.  All  the  other  demands  such  as  the  pur- 
chase of  arms  or  the  establishment  of  joint  arsenals,  the 

employment  of  Japan  .   the  right   of  Jap 

missionary  propaganda,  as  we  have  seen,  were  pressed  in 
one  form  or  another  as  before/'1 
In  spite  of  revision,  no  agreement,  however,  could  be 
ed  to  the  satisfaction  of  both  sidi  s.  (  In  May  7,  1915, 
the  Japanese  presented  an  ultimatum  demanding  a  sat- 
isfactory reply  within  two  days.  All  the  articles  in  groups 
1,  2,  3,  4  and  the  article  on  Fukii  n  in  ( iroup  V  of  the  re 
vised  demands  were   |  Group  V   excluding 

we  have  seen,  the  clause  on   Fukien,  was  detached  and 
postponed  for  future  negotiotion,    "So,  in  spite  of  the 


76     THE  DIPLOMATIC  HISTORY  OF  CHINA 

circumstances  which  admitted  no  patience,  they  have 
reconsidered  the  feelings  of  the  government  of  their 
neighboring  country,  and,  with  the  exception  of  the  arti- 
cles relating  to  Fukien,  which  is  to  be  the  subject  of 
an  exchange  of  notes  as  has  already  been  agreed  upon 
by  the  representatives  of  both  nations,  will  undertake 
to  detach  the  Group  V  from  the  present  negotiations,  and 
discuss  it  separately  in  the  future.  Therefore  the  Chinese 
Government  should  appreciate  the  friendly  feeling  of  the 
Imperial  Government  by  immediately  accepting,  without 
any  alteration,  all  articles  of  Groups  1,  2,  3  and  4  and 
the  exchange  of  notes  in  the  revised  proposals  presented 
on  the  26th  of  April."  52 

Coerced  by  the  ultimatum,  China  yielded.  On  the 
next  day,  she  replied  and  accepted  the  demands  as  set 
forth  in  the  ultimatum."  On  May  25,  1915,  two  treaties 
were  signed,  one  relating  to  Shantung  and  the  other  South 
Manchuria  and  Eastern  Inner  Mongolia,  and  thirteen 
notes  were  exchanged  covering  the  rest  of  the  articles 
as  accepted.  The  only  addition  was  the  pledge  of  the 
Japanese  Government  to  restore  the  leased  territory  of 
Kiaochow,  subject  to  certain  conditions.5* 

Thus  ended  the  most  sensational  diplomatic  negotia- 
tion of  this  period  of  Chinese  foreign  relations.  By  one 
hold  assault  on  China,  when  the  European  powers  were 
occupied  in  a  death  grapple  on  the  battlefields  of  Europe, 
Japan  made  herself  the  virtual  successor  to  Germany  in 
Shantung;  opened  up  the  whole  of  South  Manchuria 
to  the  exploitation  of  her  subjects,  made  an  exclusive 
sphere  of  interest  of  Eastern  Inner  Mongolia,  preserved 
the  Hanyehping  Company  for  the  joint  cooperation  of 
the  Japanese  and  Chinese  capitalists,  and  secured  the 
pledge  of  the  non-alienation  of  China's  coast.  What  she 
had  failed  to  force  on  China  was  Group  V,  which,  had 
it  been  accepted,  would  have  made  China  virtually  a  pro- 
tectorate or  vassal  of  Japan. 

Analyzing  the  demands  of  Japan   from  the  point  of 


COOPERATION  AND  CONTROL  77 

view  of  the  international  struggle  for  concessions,  Jap- 
an's action  was  simply  to  consolidate  her  own  position 
in  China,  especially  in  Shantung,  South  Manchuria,  and 
Eastern  Inner  Mongolia,  and  Fukien,  so  that  when  the 
war  should  be  over  and  the  European  tide  of  aggression 
should  again  flow  back  to  China,  she  would  be  well  en- 
trenched in  these  regions  in  any  international  struggle 
for  concessions.  Viewed,  however,  from  the  point  of 
view  of  international  cooperation  and  control,  Japan's 
action  was  simply  an  attempt  to  forestall  the  possible 
international  control  of  China,  which  she  was  far-sighted 
enough  to  forsee  and  to  anticipate  by  the  overture  of 
Japanese  control  as  embodied  in  Group  V.  Thus,  right 
or  wrong,  Japan  had  taken  good  advantage  of  the  oppor- 
tunity presented  by  the  European  War  to  consolidate 
her  own  position  in  China. 

The  Treaties  of  May  25,  1915,  however,  did  not  satisfy 
the  Japanese,  especially  the  military  party.  To  the  lat- 
ter, the  treaty  was  only  a  temporary  adjustment,  waiting 
for  a  future  and  more  opportune  moment  to  execute  its 
complete  program  in  China.  Its  aims,  to  put  them  in  a 
nutshell,  were  nothing  less  than  to  secure  a  stranglehold 
of  control  over  the  whole  of  China,  for  which  reason 
the  Japanese  Government  reserved  the  right  for  future 
discussion  of  Group  V,  and  to  wrest  the  sovereign  power 
from  China  over  South  Manchuria  and  Eastern  Inner 
Mongolia,  for  which  purpose  an  event  soon  occurred 
which  gave  the  necessary  pretense. 

In  August,  1916,  a  conflict  occurred  between  the  Chinese 
and  Japanese  soldiers  at  Changkiatun,  a  Mongol-Man- 
churian  town,  resulting  in  casualties  on  both  sides.  The 
original  cause  leading  to  the  armed  conflict  was  a  quarrel 

and  fist-fighl   between  a  Japanese  <ni  <mv  band,   wbo  bad 

beaten  a  Chinese  boy  for  refusal  t<>  sell  fish  at  bis  price, 
and  several  (  hinese  soldiers  who  came  to  the  rescue  of  the 
boy  on  the  other.  Taking  advantage  of  this  incident, 
the   Japanese    Government    at    once    demanded    nut    only 


78     THE  DIPLOMATIC  HISTORY  OF  CHINA 

reparation  and  apology,   which  were  i  I,  but,  to 

the  surprise  of   China,  the   pol  wer  and  military 

supervision  of  South  Manchuria  and  a  tnner  Mon- 

golia also :  '  "<  'hina  to  agree  to  the  stationing  of  Japanese 
police  officers  in  places  in  South  Manchuria  and  Eastern 
Inner  Mongolia  where  their  presence  was  considered 
necessary  for  the  protection  of  Japanese  subjects,"  and 
"Chinese  military  cadet  schools  to  employ  a  certain  num- 
ber of  Japanese  officers  as  instructors." 

These  demands  again  opened  the  wound  of  the  Chinese 
as  created  by  the  Twenty-one  Demands.  As  a  result, 
viewing  this  as  another  attempt  to  revive  Group  V,  the 
Chinese  rose  and  resisted  the  demands  with  all  their 
might.  Meanwhile  the  Okuma  Cabinet,  which  had  en- 
gineered the  Twenty-one  Demands  and  also  those  for  the 
Changkiatun   incident,   suff  vere   popular  censure 

for  the  mishandling  of  Chinese  relations,  and  were  com- 
pelled to  yield  to  the  Terauchi  Cabinet,  which  adopted  a 
more  conciliatory  attitude.  Consequently  the  case  was 
closed  without  the  concession  of  police  power  and  the 
military  supervision  of  South  Manchuria  and  Eastern 
Inner  Mongolia,  but  merely  with  the  ordinary  apology 
and  compensation  due  to  Japan. 

While  Japan  was  thus  bullying  China,  the  question  of 
China's  entrance  into  the  war  on  the  side  of  the  Allies 
came  into  prominence.  At  the  beginning  of  the  war, 
China  had  intimated  her  intention  to  join  in  the  attack 
on  Tsingtau,  but  the  proposal  was  not  favorably  enter- 
tained.50 Again,  during  the  monarchial  restoration  in 
the  latter  part  of  1915,  Yuan  Shih-kai,  to  win  the  sup- 
port of  the  Allies  to  his  monarchial  project,  had  again 
offered  to  join  the  Allies,  a  proposal  which  the  Ru 
and  French  legations  had  favorably  entertained,  but 
from  which  Japan  and  Great  Britain  had  dissented.57 
Then  came  the  circular  note  of  February  4,  1917,  of  the 
United  States  inviting  the  neutral  nations  to  join  in  a 


COOPERATION  AND  CONTROL  79 

diplomatic  severance  from  Germany.  At  the  urgent  solici- 
tation of  the  United  Slates  minister  and  other  Allied 
agents,  China  took  the  hold  step  on  March  14,  1917,  when 
she  broke  off  her  relations  with  Germany. 

Following  the  diplomatic  break,  the  question  naturally 
arose  as  to  the  declaration  of  war  on  Germany  and 
Austria.  The  pros  and  cons  of  the  argument  were  pre- 
sented. The  opinion  seemed  to  be  evenly  divided.  Those 
favoring  the  step  believed  that  the  Allies  were  lighting 
for  democracy  and  the  rights  of  weaker  nations,  and 
that  the  entrance  of  China  would  give  her  a  seat  at  the 
Peace  Conference  when  she  could  defend  her  own  in- 
terests. It  must  also  be  noticed  here  that  the  senti- 
mental ground  of  following  the  lead  of  her  best  and 
most  disinterested  friend,  the  United  States,  played  no 
small  part  in  influencing  the  decision  of  the  Govern- 
ment. Those  opposing  it,  on  the  other  hand,  feared 
that  Germany  might  win  the  war,  and  then  would  visit 
retribution  on  China,  and,  moreover,  they  were  not  at 
all  certain  as  to  the  professions  of  the  Allies  regarding 
their  war  aims. 

While  Chinese  opinion  was  so  divided,  Japan  cast  the 
weight  of  her  influence  on  the  side  of  the  opposition. 
Her  minister  at  Peking  counseled  President  Li  Yuan- 
hung  not  to  follow  the  example  of  the  United  States.08 
Meanwhile,  realizing  that,  in  the  event  of  China's  en- 
trance into  the  war,  she  would  certainly  contest  the  Ger- 
man rights  in  Shantung  at  the  Peace  Conference,  and, 
recalling  the  painful  experience  of  the  tripartite  inter- 
vention in  1895  which  deprived  her  of  the  Liaotung 
Peninsula,  Japan  moved  to  forestall  such  an  eventuality. 
She  approached  the  Allied  Governments  during  February 
and  March  of  1917  for  assurances  as  to  the  final  dis- 
posal of  the  German  Islands  in  the  Pacific  north  of 
[uator  and  German  rights  in  Shantung.  The  allied 
governments  gave  their  pledges,  one  after  the  other,  the 
British  on  February    16,   the  French  on  March   1,   the 


80     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Russian  on  March  5,  the  Italian  on  March  23.  1917." 
I  he  agreement  as  to  these  secret  assurances  was  not 
known  to  China  nor  to  the  United  States,  until  the 
Peace  Conference  when  the  Shantung  quest  inn  was  con- 
sidered. Having  thus  received  the  secret  pledges,  Japan 
withdrew  her  opposition  to  China's  entrance  into  the 
war. 

The  withdrawal  of  Japan's  opposition  did  not,  how- 
ever, leave  China  free  to  take  the  momentous  step.  She 
had  another  obstacle  to  overcome  which  soon  proved 
to  be  of  vital  consequence,  and  that  was  the  opposition 
of  the  Chinese  Parliament.  Being  dominated  by  the 
opposition,  the  Parliament  refused  to  declare  war  under 
the  leadership  of  the  northern  party.  Thus  a  deadlock 
ensued  between  the  Parliament  and  the  Cabinet.  To 
cut  the  knot,  the  President  dismissed  the  Prime  Min- 
ister, the  leader  of  the  northern  party.  Thereupon  the 
northern  party,  threatened  by  the  imminent  loss  of  posi- 
tion, revolted  and  demanded  the  dissolution  of  the  Par- 
liament. Under  the  pressure  of  the  northern  military 
governors,  the  President  yielded  and  dissolved  the  Par- 
liament. The  southern  or  so-called  constitutional  party 
forthwith  left  Peking  in  a  body,  and  assembling  at  Can- 
ton, established  a  provisional  military  government  in  op- 
position to  the  Peking  government,  and  at  the  same  time 
declared  war  on  the  north.  Thus  the  civil  war  com- 
menced. Meanwhile  the  northern  party  had  again  gained 
control  of  the  Peking  government  by  defeating  General 
(  hang  Hsun  who  had  taken  advantage  of  the  situation 
by  an  attempt  to  reestablish  the  Manchu  Dynasty.  Once 
more  firmly  seated  in  the  saddle  in  Peking,  the  northern 
military  party  declared  war  on  Germany  and  Austria- 
Hungary  on  August   14,  1917.80 

In  this  connection  it  should  be  said  that  when  the 
question  of  the  declaration  of  war  had  plunged  China 
into  civil  dissension,  President  Wilson,  on  June  7,  1917, 


COOPERATION  AND  CONTROL  81 

addressed  a  friendly  note  to  the  Chinese  Government, 
warning  them  against  internal  discord,  and  advising  that 
the  entry  of  China  into  the  war  was  of  secondary  con- 
sideration, while  the  establishment  of  a  central,  united 
and  responsible  government  was  of  prime  importance.81 
To  this  note  the  Japanese  took  strong  exception,  and,  in 
fact,  deeply  resented  the  unwarranted  interference  of 
the  United  States  in  the  affairs  of  China  without  first 
consulting  Japan. G- 

To  secure  the  recognition  from  the  United  States  of 
her  special  position  in  China  and  for  some  other  minor 
affairs,  and  following  the  practice  of  the  other  powers 
then  in  vogue  of  sending  war  missions  to  the  United 
States,  Japan  sent  an  Imperial  Mission  in  August,  1917, 
to  the  United  States  under  the  leadership  of  Viscount 
Ishii.03  As  a  consequence  of  the  negotiations,  an  agree- 
ment was  concluded  on  November  2,  1917,  between  Sec- 
retary Lansing  and  Viscount  Ishii,  now  commonly 
known  as  the  Lansing-Ishii  Agreement.  Japan  and  the 
United  States  reaffirmed  the  Open  Door  policy  in  China, 
and,  in  addition,  they  "deny  that  they  have  any  purpose 
to  infringe  in  any  way  the  independence  or  territorial 
integrity"  of  China.  The  United  States,  however,  on 
the  other  hand,  recognized  Japan's  special  interets  in 
China,  particularly  in  those  sections  where  the  territories 
are  contiguous.*4 

This  agreement  was  entered  into  without  the  knowl- 
edge of  the  Chinese  Government.  Fearful  of  what  the 
recognition  by  the  United  States  of  Japan's  special  inter- 
in    China    might    mean    in    the    future,    the    Chinese 

Government  despatched  a  declaration  to  the  Govern- 
ment- of  the  United  Stales  and  Japan.''   announcing  that 

(  hina  would  nut  he  bound  by  any  agreement  entered  into 

by  other  countries,  and  that  she  would  respect  special 
interests  ot  another  nation  due  to  territorial  propinquity 

only  in  SO  far  as  they  are  provided  in  the  existing 
treaties. 


82     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Following  the  Lansing-Ishii  agreement,  the  German 
menace  in  Siberia  loomed  large,  threatening  the  very 
existence  oi  China  and  Japan.  The  Russian  Soviets 
had  just  surrendered  Russia  to  Germany,  and  German 
and  Austrian  prisoners  were  active  in  Siberia.  To  fore- 
stall the  possible  invasion  through  Siberia  by  the  Ger- 
man and  Austrian  prisoners,  Japan  and  China  concluded, 
on  March  19,  1918,  two  secret  agreements,  one  relating 
to  military  cooperation  and  the  other  to  naval.  The 
agreements  were  to  be  enforced  upon  the  commence- 
ment of  hostilities,  but  "shall  become  null  and  void  as 
soon  as  the  military  operations  of  China  and  Japan 
against  the  enemy  countries  of  Germany  and  Austria 
come  to  an  end."  00 

On  November  11,  1918,  the  Armistice  of  the  Great 
War  was  declared,  and  on  January  18,  1919,  the  Paris 
Peace  Conference  was  organized.  As  an  ally,  China 
was  admitted  as  one  of  the  minor  states  with  two  pleni- 
potentiary seats  at  the  peace  table.  China  claimed,  inter 
alia,  the  restoration  of  her  rights  in  Shantung,  including 
the  leased  territory  of  Kiaochau,  the  Tsingtao-Tsinan 
Railway,  and  the  mines  adjoining  thereto.07  On  the 
other  hand,  Japan  claimed  the  same  German  rights  in 
Shantung  on  the  strength  of  the  secret  pledges  obtained 
from  the  Allied  Governments  in  February  and  March 
of  1917,  and  her  pledge  that  she  would  restore,  sub- 
ject to  certain  conditions,  the  leased  territory  of 
Kiaochau.  Thus  the  issues  were  joined.  Both  China 
and  Japan  claimed  the  same  rights  in  Shantung,  which 
Germany  had  held. 

The  decision  of  the  case,  as  we  know,  rested  with 
lent    Wilson.      Great    Britain    and     France,    having 

already  pledged  to  Japan,  Lloyd  George  and  Clemenceau 
were  unable  to  do  otherwise  than  to  support  Japan's 
claim.  Italy  had  withdrawn  from  the  Council  of  Five 
in  consequence  of  the  Fiume  cmestion.     President  Wil- 


COOPERATION  AND  CONTROL  83 

son  was  left  alone  to  decide  the  case.  If  he  should  de- 
cide in  favor  of  China,  he  might  cause  the  exodus  of 
the  Japanese  delegation,  as  he  had  witnessed  a  few 
days  before  the  painful  scene  of  the  Italian  withdrawal. 
If,  on  the  other  hand,  he  should  decide  in  favor  of 
Japan,  he  would  compromise  his  principles  of  justice 
and  right,  especially  in  vivid  contrast  with  the  stand  he 
had  taken  on  the  Fiume  question.  As  he  was  bent  on 
consummating  the  organization  of  the  League,  however, 
and  as  he  could  not  afford  to  lose  Japan  from  its  mem- 
bership, he  yielded,  and  on  April  30,  awarded  the  deci- 
sion to  Japan. 

With  the  announcement  of  this  decision,  the  Chinese 
Peace  Commission  was  not  only  gravely  disappointed, 
but  also  at  a  loss  to  know  what  to  do:  ''Shall  China  sign 
the  Peace  Treaty  with  Germany  with  the  Shantung 
clauses  in  ?  Or,  shall  she  refuse  to  sign  and  thus  not 
become  a  member  of  the  League?" — That  was  the  ques- 
tion. China  could  not  assent  to  the  Shantung  decision, 
and  yet  she  could  not,  and  would  not,  be  excluded  from 
the  membership  of  the  League.  In  the  face  of  these 
conflicting  considerations,  the  Chinese  Peace  Delegation 
wisely  decided  to  sign  the  treaty  and  thereby  become  a 
member  of  the  League,  but  with  a  reservation  on  the 
Shantung  clauses  (Arts.  156,  157  and  158).  To  this 
end  the  Chinese  Peace  Delegation  entered  a  formal  res- 
ervation on  May  6  at  the  Plenary  Session  of  the  Pre- 
liminary Peace  Conference.  To  the  disma)  and  sur- 
prise of  the  Chin<  .  however,  th  nation 
was  rejected,  and  ev<  n  a  declaration  to  the  effect  that  the 
signature  of  the  Chinese  plenipotentiaries  was  not  to 
preclude  China  from  demanding  at  a  suitable  moment 

■  consideration  of  tin-  Shantung  question.    As  China 
would  rather  lose  membership  in  the  League  than 

her  own   warrant   for  the  unjust   disposition  of   German 

■  in   Shantung,   the   Chinese  delegates   refused   t" 
sign   the  treaty  on  June  28,  1919.'s     '1  Ik-  signing,  how- 


84     THE  DIPLOMATIC  HISTORY  OF  CHINA 

ever,  of  the  subsequent   Austrian  Treaty  made  China  a 
member  of  the  League. 

The  effect  on  the  Chinese  people  of  the  Shantung 
decision  was  of  the  greatest  significance.  It  caused  the 
Chinese  to  realize  that  the  world  had  not  yet  attained  a 
stage  of  development  when  right  would  always  win  on 
the  merits  of  right  only,  but  that  the  right  to  win  must 
be  backed  by  might.  It  also  caused  the  Chinese  to  realize 
that  it  was  useless  to  look  for  help  from  friendly  Pow- 
ers, but  they  must  find  salvation  among  themselves.  It 
further  impressed  on  the  Chinese  mind  that  the  source 
of  weakness  was  due  to  the  corruption  and  incompetency 
of  the  Chinese  Government,  rather  than  to  the  inherent 
weakness  of  the  people  themselves.  As  a  result  of  these 
painful  realizations,  the  Chinese  nationalism,  cut  to  its 
quick,  burst  out  in  magnificent  exuberance.  When  the 
Shantung  decision  reached  China,  the  students  com- 
menced a  strike,  and  drove  out  of  office  several  most 
notorious  pro-Japanese  officials,  who  were  believed  to 
have  betrayed  China.  Then  followed  a  nation-wide 
boycott  against  the  use  of  Japanese  goods.  On  the  other 
hand,  the  effect  of  the  decision  on  Japan  was  not  salu- 
tary. While  victorious  at  the  Peace  Conference,  she 
lost  the  confidence  and  admiration  of  many  of  her 
friends. 

As  the  war  was  over,  the  Powers,  maimed  hut  not 
entirely  disabled,  returned  to  China  again  as  their  sphere 
of  action  in  the  Orient.  Will  they  follow  the  policy  of 
an  international  struggle  for  concessions,  or  of  inter- 
national cooperation  and  control?  This  is  the  question 
that  every  earnest  student  of  the  foreign  relations  of 
China  would  wish  to  know.  Hitherto  all  indications 
point  to  the  conclusion  that  the  Powers  returning  to 
China  would  adopt  the  policy  of  international  coopera- 
tion and  control.  The  United  States,  the  champion  of 
the  Open  Door  policy,  has  abandoned  her  policy  of  aloof- 


COOPERATION  AND  CONTROL  85 

ness,  and  is  ready  to  participate  in  the  affairs  of  China, 
and  exert  her  influence  tor  the  principles  of  the  Open 
Door  doctrine.  Besides,  the  Powers  were  too  much  in- 
jured by  the  war  to  be  able  to  enter  into  another  heated 
contest  for  concessions,  at  least  for  the  near  future. 
Further,  the  close  cooperation  which  they  have  experi- 
enced during  the  war  will  enable  them  to  follow  the 
policy  of  international  cooperation  and  control  rather 
than   that   of    international   struggle   for  concessions. 

To  give  concrete  effect  to  this  policy  of  international 
cooperation  and  control,  the  banking  groups  of  the  Al- 
lied Powers, — France,  Great  Britain,  Japan  and  the 
United  States, — at  the  invitation  of  the  United  States 
Government,  met  at  the  Paris  Peace  Conference  on  May 
11  and  12,  1919.  The  step  for  such  an  international 
banking  conference  relating  to  China  had  been  previ- 
ously determined  at  a  conference  of  a  number  of  Ameri- 
can bankers  at  the  Department  of  State  in  June,  1918, 
which  was  convened  in  consequence  of  the  request  of 
the  Chinese  Government  for  a  war  loan.  The  Confer- 
ence of  May  11  and  12,  1918,  at  Paris,  resulted  in  the 
tentative  formation  of  a  New  International  Banking 
Consortium.  The  qualification  for  membership  is  the 
relinquishment  in  favor  of  the  Consortium  of  all  prior 
options  to  make  loans  in  China.  The  bankers  of  the 
four  Powers  are  to  be  organized  into  national  banking 
groups,  each  participating  in  full  partnership,  ami  <>n 
a  basis  of  equality.  The  Consortium  is  nut  to  invade 
the  field  of  private  enterprises,  but  is  to  limit  its  sphere 
of  action  to  public  undertakings  of  a  basic  character. 
All  agreements  of  the  Consortium  must  be  subject  to 
the  approval  of  the  Governments  of  the  national  groups 
concerned.  I  he  final  agreement  of  the  Consortium  was 
signed  on  October  15,  1920,  in  New  York  City. 

It  soon   developed,   however,   that   Japan    was  not  in 

pel  feel    accord    with    the    agreement    of    the    Consortium. 

Prior  to  the  final  agreement  of  1920,  the  Japanese  Gov- 


86     THE  DIPLOMATIC  HISTORY  OF  CHINA 

eminent  qualified  its  assent  by  the  reservation  that  South 
Manchuria  and  Eastern  Inner  Mongolia  should  1 

eluded  fn-in  the  operation  of  the  New  Consortium.  As 
such  a  reservation  would  be  contrary  to  the  principles 
of  the  Open  Door  doctrine,  and  would  put  Japan  in  a 
special  status  in  the  Consortium,  it  was  not  accepted  by 
the  other  Powers.  Japan,  however,  insisted,  and  that 
caused  delay  in  the  formation  of  the  Consortium. 

Finally,  to  settle  the  difficulty,  Thomas  \Y.  Lamont 
was  requested  by  the  American  banking  group,  with  the 
approval  of  the  French  and  British  groups,  and  the  con- 
currence of  the  Department  of  State,  to  visit  Japan, 
which  Mr.  Lamont  did  in  March,  1920.  As  a  conse- 
quence, a  compromise  was  reached,  whereupon  Japan 
withdrew  the  reservation  in  toto,  and  authorized  her 
banking  group  to  enter  into  the  Consortium  without  any 
qualification.69 

Viewing  this  period  as  a  whole,  in  recapitulation,  we 
can  say  that  this  was  a  period  of  international  coopera- 
tion and  control.  The  opening  of  this  period  saw  the 
conclusion  of  the  reorganization  loan,  which  was  a  clear 
evidence  of  international  cooperation  and  control.  The 
close  of  the  Great  War  witnessed  the  creation  of  a  new 
international  banking  Consortium,  which  is  a  physical 
embodiment  of  the  policy.  This  policy  was  interni] 
first  by  the  withdrawal  of  the  United  Stales  in  1913, 
which  was  followed  by  a  temporary  revival  of  the  inter- 
national struggle  for  concessions,  and  then  by  the  inter- 
position of  the  World  War,  which  drew  all  rival  nations 
to  the  battlefields  of  Europe,  leaving  Japan  alone,  su- 
preme and  untrammeled  in  the  Far  East,  the  oppor- 
tunity of  which  she  had   fully  availed  herself. 

But  during  this  period  we  may  also  notice  that  new 

forces  have  come  into  the  life  of  China.  I'he  first  is 
the  Japanese  effort  to  gain  the  control  of  China  during 
the  World  War.     In  order  to  forestall  the  exigency  of 


COOPERATION  AND  CONTROL  87 

the  international'  control  of  China,  Japan  made  the  abor- 
tive attempt  by  the  presentation  of  Group  V  of  the  21 
demands.  The  other  is  the  full  awakening  and  maturity 
of  Chinese  nationalism,  which  was  touched  to  the 
quick  by  the  Shantung  decision  and  which  promises  to 
be  the  savior  of  Chinese  independence  in  the  days  to 
come. 

This  completes  our  sketch  of  the  diplomatic  history 
of  China.  Viewing  the  four  periods  as  a  whole,  we 
clearly  discern  that  there  are  definite  tendencies  and 
forces  at  work. 

First,  we  have  seen  that  the  Chinese  did  not  welcome 
Western  intercourse  in  the  first  and  second  periods,  and, 
in  fact,  they  were  hostile  to  the  unwarranted  interfer- 
ence with  their  isolation  and  tranquillity.  During  the 
first  period  they  were  haughty,  feeling  themselves  supe- 
rior to  western  barbarians.  During  the  second  period, 
while  they  had  abandoned  the  conceit  of  superiority,  they 
were  still  antagonistic  to  the  west.  This  hostile  attitude 
culminated  in  the  Boxer  Uprising  of  the  third  period 
in  1900.  Thereafter,  however,  the  Chinese  attitude 
underwent  a  radical  change.  Instead  of  feeling  superior, 
they  regarded  themselves  as  inferior;  instead  of  being 
hostile,  they  welcomed  Western  contact,  and  were 
anxious  to  learn   the  best  of  Occidental  civilization. 

On  the  other  hand,  the  attitude  of  the  Western  na- 
tions, during  the  first  period,  was  one  of  struggling  for 
equality,  and  during  the  second  period,  that  of  treating 
China  more  or  less  on  a  basis  of  equality;  bul  when  the 
third  period  eame,  it  distinctly  changed  for  the  worse 
and  they  regarded  the  Chinese  as  an  inferior  and  down- 
trodden race  destined  to  be  ruled  by  the  West.  After, 
however,  the  Chinese  Revolution  took  place  in  I'M  1 .  it 

began   to   change   for  the   better,  and   when   China  joined 

the  Allies  in  1917  and  subsequently  proved  herself  to  be 
worthy  of  respect  and  admiration  at  the  Paris   Peace 


88     THE  DIPLOMATIC  HISTORY  OF  CHINA 

Conference  and  in  the  League,  Western  states  began  to 
assume   more  and   more  an   attitude  of   equality. 

Second,  the  method  and  nature  of  Western  aggression 
have  undergone  a  radical  change  during  the  four  periods 
of  Chinese  diplomatic  history.  In  the  first  period,  the 
Western  states  were  merely  hent  on  opening  China  for 
trade  and  intercourse.  In  the  second  period,  having 
opened  China,  they  deprived  her  of  one  dependency 
after  the  other.  In  the  third  period,  when  protection 
from  the  dependencies  was  eliminated  and  the  weakness 
of  China  was  revealed  by  Japan's  easy  victory,  they 
entered  into  an  international  struggle  for  concessions, 
victimizing  China  and  threatening  her  very  integrity.  In 
the  fourth  and  present  period,  however,  they  have 
changed  their  policy  from  struggle  to  cooperation,  and 
from  partition   to   control. 

On  the  other  hand,  the  Chinese  were  determined  to 
preserve  themselves  in  the  face  of  Western  aggression. 
In  the  first  period,  while  China  was  heing  opened  up, 
they  were  fast  asleep.  In  the  second  period,  when  the 
outlying  dependencies  were  being  taken  away  one  after 
the  other,  the  Chinese  were  still  asleep.  In  the  third 
period,  when  Western  nations  began  to  threaten  the 
very  existence  of  China,  they  speedily  woke  up.  They 
first  resorted  to  the  fanatical  attempt  to  expel  all  "for- 
eign devils"  from  China,  as  was  shown  in  the  Boxer 
Uprising,  and  having  failed  in  that  endeavor  and  being 
humiliated,  they  directed  their  efforts  at  the  reforma- 
tion of  their  government,  as  manifested  in  the  Chinese 
Revolution  of  1911.  In  the  fourth  and  present  period, 
Chinese  nationalism  was  wide-awake,  determined  to  save 
their  land  and  independence  from  the  encroachments  of 
either  the  West  or  Japan. 

With  this  sketch  of  Chinese  diplomatic  history,  let 
us  now  turn  to  the  policies  of  the  Great  Towers  in 
China,  which   will   he  treated  in  Parts  II  and   III.70 


COOPERATION  AND  CONTROL  89 


NOTES  TO  CHAPTER  IV 

1.  MacMurrav,  Treaties  and  Agreements  with  and  Concern- 
ing China,  1911/2. 

2.  MacMurrav,  ibid.,  China  Year  Book,  1912,  p.  288. 

3.  MacMurrav.  ibid.,   1911/2. 

4.  MacMurrav,  ibid.,  1913/5. 

5.  MacMurrav,  ibid.,  1912/4. 

6.  For  a  full  account,  see  F.  H.  Huang,  Public  Debts  in 
China,  ch.  on  The  Reorganization  Loan  of  1913,  pp.  56-71. 

7.  F.  H.  Huang,  ibid.,  pp.  58-59;  China  Year  Book,  1913,  pp. 
358-359. 

8.  MacMurrav,  op.  cit.,  1912/9;  China  Year  Book,  1913,  pp. 
359-364. 

9A.    China  Year  Book,  1914,  p.  379. 
9B.    U.  S.  For.  Rel.,  1913,  pp.  170-171. 

10.  MacMurrav,  op.  cit.,  1913/5. 

11.  China  Year  Book,  1914,  p.  387. 

12.  MacMurrav,  op.  cit.,  1912/11. 

13.  MacMurrav,  ibid.,  1912/11. 

14.  Far  Eastern  Review,  Jan.,  1921,  pp.  31-33. 

15.  MacMurray,  op.  cit,  1913/8. 

16.  MacMurrav,  1913/10. 

17.  MacMurrav,  1914/2. 

18.  MacMurray,  1895/5. 

19.  MacMurray,  1913/16. 

20.  It  is  to  be  observed  here  in  this  connection  that  later,  on 
September  24,  1918,  Japan  secured  the  concession  of  these  two 
railways,  changing,  however,  Hancbuang  to  Hsuchowfu. 

21.  MacMurrav,  op.  cit.,  1913/12. 

22.  MacMurrav,  1914/7. 

23.  MacMurrav,  1914/7. 

24.  MacMurray,  1914/4. 

25.  The  Chino- Japanese  Negotiations,  published  by  the  Chinese 
Government,  1915,  pp.  10-11. 

26.  MacMurrav,  op.  cit.,  1916/6. 

27.  MacMurray,  1916 

28.  MacMurray,  \(>\(,/7. 

29.  MacMurrav,   1913/9. 

30.  MacMurrav.   1913/9. 

31.  MacMurrav,   1918/16. 

32.  MacMurrav.   1917/9. 

33.  MacMurray,  1918/7. 

34.  MacMurra 

35.  MacMurrav,   1918/11. 

36.  MacMurray,  1916/3. 

37.  MacMurrav.    1911/13. 

38.  MacMurray,  1912/12. 

39.  MacMurray,   1913/11. 


90     THE  DIPLOMATIC  HISTORY  OF  CHINA 

4().    MacMurray,  1914/12. 

41.  MacMurray,  1915   10. 

42.  The  Shantung  .  officially  presented  by  the  Chinese 

Delegation  t«>  the  Paris  Conference  of  1919.  published  by 
itional  Welfare  Society,  1920,  pp.  39-40. 

43.  The  Chino-Japanese  Negotiations,  p.  19. 

44.  Ibid.,  pp.  19-21. 

45.  Ibid.,  p.  21. 
4o.    Ibid.,  p.  21. 

47.  Millard,  Democracy  and  the  Eastern  Question,  Appendix, 
PP.  Mh-2>77. 

48.  The  Chino-Japanese  Negotiations,  op.  cit.,  p.  23. 

49.  II .id.,  pp.  24-27. 

50.  Ibid.,  p.  27. 

51.  Ibid.,  pp.  28-29. 

52.  Ibid.,  p.  42. 

53.  Millard,  op.  cit.,  App.,  pp.  405-406. 

54.  The  Chino-Japanese  Negotiations,  pp.  53-54. 

55.  B.  L.  Putnam  Weale,  The  Fight  for  the  Republic  in  China, 
p.  302. 

56.  The  ShanUme  Question,  p.  40;  Millard,  op.  cit.,  pp.  55-96. 

57.  Ibid.,  pp.  97-100.' 

58.  Ibid.,  p.  106. 

59.  Millard's  Review,  Supplement,  July  17,  1920,  China's  Case 
at  the  Peace  Conference,  pp.  1-3. 

60.  The  Shantung  Question,  App.  to  Vol.  2,  No.  18,  pp.  04-65. 

61.  W.  R.  Wheeler,'  China  and  the  World  War,  pp.  93-94. 

62.  Millard,  Democracy  and  the  Eastern  Question,  p.  118  et 
seq. 

63.  For  a  detailed  account  of  the  Mission,  see  The  Imperial 
Japanese  Mission  to  the  United  States,  1917,  pub.  by  the  Car- 
negie Endowment   for  [nternatl.  Peace. 

64.  Hearings  before  the  Committee  on  Foreign  Relations  in 
the  United  States  Senate,  66th  Congress,  First  Session,  pp.  225- 
226. 

65.  Millard,  op.  cit.,  p.  164. 

66.  Ibid..  App.  C,  pp.  421-425. 

67.  For  the  full  t(  xt  of  the  claims,  see  Millard's  Review,  Sup- 
plement. July  17,  1920,  China's  Case  at  the  Peace  Conference, 
pp.  4-6. 

68.  For  a  full  account,  see  Millard's  Review,  Supp.,  July  17, 
1920,  pp.  10-13. 

69.  For  a  full  account,  see  Thomas  W.  Camont,  Preliminary 
Report  on  the  New  Consortium  for  China,  1920;  also  see  below 
the  chapters  on   the   New   International    Banking  Consortium. 

70.  During  this  period  Chile  entered  into  treat]  relations  with 
China  on  Feb.  18,  1915  (MacMurray,  1915/2),  and  Switzerland, 
on  June   13,   1918    (MacMurray,   1«'1878). 


PART  II 

POLICIES  OF  THE  GREAT  POWERS  IN  CHINA 

V.  The  Policy  of  Russia 

VI.  The  Policy  of  France 

VII.  The  Policy  of  Germany 

VIII.  The  Policy  of  Great  Britain 

IX.  The  Policy  of  the  United  States 


THE  POLICY  OF  RUSSIA  IN  CHINA 

The  policy  of  Russia  in  China  has  been  one  of  terri- 
torial expansion.  She  has  pursued  this  policy  persistently 
until  checked  by  the  Russo-Japanese  War  of  1904-5,  and 
interrupted  by  the  Soviet  Revolution  of  1917.  The  ob- 
jective behind  her  policy  was  to  reach  an  ice-free  seaport. 
Russia  had  attempted  to  approach  the  Mediterranean 
through  the  Balkan  Peninsula,  but  had  been  definitely 
blocked,  for  the  Great  Powers  considered  her  advance  in 
that  direction  dangerous  to  the  integrity  of  the  Ottoman 
Empire,  and  to  the  balance  of  power  in  Europe.  She 
had  then  attempted  to  reach  the  Persian  Gulf  and  the 
Indian  Ocean  through  Persia  and  Central  Asia,  but  that 
door  had  been  effectively  closed  by  England.  Thus  frus- 
trated, she  finally  concentrated  all  her  energies  on  estab- 
lishing a  foothold  on  the  Pacific.  After  the  acquisition 
of  the  maritime  province  by  the  Treaty  of  1860  with 
China,  she  built  the  city  of  Vladivostok  facing  the  Pacific 
but  that  was  ice-bound  for  part  of  the  year.  So  she  was 
compelled  to  turn  southward  toward  North  China. 

To  carry  out  this  policy  astutely,  she  adopted  a  method 
of  reaching  her  ends,  which  was  unique  and,  at  the 
same  time,  unscrupulous.  That  is,  she  always  pretended 
to  be  the  friend  of  the  weaker  state  which  she  aimed 
to  absorb  or  annex  by  extending  the  protection  of  her 
alliance  to  the  latter.  Having  thus  broken  down  the 
wall  of  distrust,  she  would  then  obtain  strategic  points 
or  concessions  as  a  preliminary  to  her  final  occupation 
or  absorption.  In  addition,  she  did  not  hesitate  to  re- 
sort to  corruption,  in  case  that  could  open  up  the  way 
to  her.     Expressed  in  the  words  of  E.  J.  Dillon:  • 

93 


94      POLICIES  OF  GREAT  POWERS  IN  CHINA 

"Russia's  foreign  policy  in  the  past,  whatever  its  real 
motives,  may  therefore  be  summarily  described  in  the 
light  of  its  effects  as  ruinous  'protection'  of  the  feeble. 
It  was  the  lethal  hug  of  the  polar  bear.  She  would  shield 
the  government  of  a  weaker  neighbor  from  the  immediate 
consequences  of  its  own  folly,  and  enable  it  to  go  on  mis- 
governing its  subjects,  thwarting  attempts  at  internal  re- 
form, financial  and  administrative.  The  body  politic 
would  thus  be  left  to  decompose  until  it  entered  upon  a 
stage  sufficiently  advanced  to  allow  of  its  being  digested 
almost  without  an  effort.  ...  It  is  thus  that  Georgia, 
Persia,  Turkey,  China,  Korea,  were  dealt  with." 

In  short,  the  Russian  policy  was  imperialistic,  unscrupu- 
lous, and  opportunistic. 

Having  seen  the  general  nature  of  the  Russian  policy, 
we  shall  now  trace  its  development.  The  Siberian  ex- 
pansion of  Russia  was  eilected  in  the  17th  century,  within 
a  period  of  seventy  years.  It  was  done,  not  by  the  order 
of  the  Government,  hut  rather  by  the  pluck  and  initiative 
of  the  freebooters  of  fortune  who  went  there  for  self- 
interest  and  new  abode.  It  was  consummated  very  much 
as  was  the  westward  expansion  of  the  United  States, 
except  that  the  Siberian  expansion  did  not  result  in  any 
great  educational  and  economic  development  of  the  set- 
tled regions.    Using  the  language  of  E.  J.  Harrison: 2 

"It  is  equally  important  to  note  that  the  action  of  these 
Siberian  pioneers  was  wholly  voluntary  and  in  no  sense 
dictated  by  orders  from  the  central  government.  Later 
on  it  was  continued  under  the  pretext  of  searching  for 
'free  lands,'  but  personal  gain  was  actually  at  the  root 
of  the  movement  from  the  first  to  the  last,  the  empire 
occupying  quite  a  secondary  place  in  the  calculations  of 
these  adventurers,  although  the  Government  had  no  ob- 
jection to  recognizing  an  accomplished  fact,  and  assumed 
nominal  control  over  the  lands  thus  subjugated.  In 
truth,  however,  for  three  hundred  years  Siberia  remained 
destitute  of  proper  administration,  means  of  communi- 


THE  POLICY  OF  RUSSIA  IN  CHINA       95 

cation,  colonization,  education,  and  real  citizenship.  .  .  . 
The  ostensible-  outward  success  of  this  enterprise  was  due, 
not  to  a  species  of  epic  pressure,  or  all-powerful  national 
momentum  but  simply  to  the  absence  of  resistance  from 
the  other  side.  .  .  ." 


This  eastward  expansion  of  Russia  into  Siberia  could 
not  but  come  into  conflict  with  the  Chinese.  As  early 
as  about  1650  the  Russian  pioneers  had  penetrated  the 
Amur  region,  which  was  then  Chinese  territory.  At  this 
time  the  Manchu  Dynasty  which  had  just  established 
itself  on  the  Chinese  throne  (1642)  was  busily  occupied 
with  the  conquest  and  pacification  of  China  proper. 
After  about  twenty  years,  however,  the  Manchus.  having 
finally  established  themselves  in  China,  turned  their  at- 
tention to  the  Russian  encroachment.  They  wiped  out 
the  Russian  settlements  at  Sungari  and  pushed  the  Rus- 
sians back  far  beyond  the  Amur  region  and  established 
Aigun  and  Tsitsihar  as  advance  posts  against  Russian 
aggression.  Twice  did  the  Russians  return  to  Albazin, 
but  twice  were  they  driven  back.  As  a  conseepjence  of 
this  conflict,  the  Treaty  of  Nerchinsk  was  concluded 
in  1689.  The  Albazin  fortress  of  Russia  was  demol- 
ished, and  the  Amur  region  became  a  de  facto  Chinese 
territory.  Thus  the  Russians  were  pushed  back  by  the 
Manchus  in  this  early  confiT  I 

After  the  lapse  of  more  than  a  century  and  a  half, 
another  adventure  of  the  Russians  was  made.  This 
time,  however,  the  advance  was  ordered  with  the  sup- 
port, and  under  the  guidance,  of  the  Russian  Govern- 
ment. About  1854  the  Russians  occupied  the  Amur  re- 
gion again.    This  move  was  made  largely  because  the 

Crimean    War    of    that    time    had    blocked    the     Russian 

ambition  to  reach  an  ice-fret-  seaport  through  Constan- 
tinople, and  the  Russian  Government  was  consequently 
compelled  to  seize  the  Amur  River  as  the  possible  out- 
let.4    This  advance  on  the  part  of   Russia  was  not  op- 


96      POLICIES  OF  GREAT  POWERS  IN  CHINA 

posed  by  the  Chinese,  for  the  Manchu  Dynasty  had 
then  its  hands  full  with  the  Taiping  rebellion,  which 
was  threatening  the  safety  of  the  Dynasty. 

Having  accomplished  the  occupation,  the  Russian  Gov- 
ernment proceeded  to  secure  the  recognition  of  a  fait 
accompli  from  the  Chinese  Government.  Characteristic 
of  the  foreign  policy  of  Russia,  the  Czar's  Government 
took  advantage  of  the  Taiping  rebellion  and  offered  to 
suppress  the  revolt  in  exchange  for  the  cession  of  Man- 
churia,5 which  was,  however,  declined.  Later,  during 
the  second  war  with  Great  Britain  and  France  (1857- 
1860),  as  the  allied  forces  were  advancing  on  Canton 
and  Taku,  Russia  again  took  advantage  of  the  situa- 
tion and  secured  the  recognition  from  China  of  the  north- 
ern bank  of  the  Amur  River  as  Russian  territory  by  the 
Treaty  of  Aigun,  1858. 6  Finally,  as  the  allied  forces 
captured  Peking  in  1860  to  enforce  the  ratification  of 
the  treaty  of  Tientsin,  1858,  she  posed  as  the  friend 
and  savior  of  the  Manchu  Dynasty  by  inducing  the  quick 
withdrawal  of  the  allied  forces  from  Peking.  In  rec- 
ognition of  this  service,  the  Aigun  treaty  was  confirmed 
and  the  Treaty  of  Peking  was  signed,  ceding  to  Russia, 
as  we  have  seen,  the  territory  east  of  the  Ussouri  River, 
including  the  maritime  province.7  Thus,  backed  by  the 
Russian  Government,  and  taking  advantage  of  the  Tai- 
ping rebellion  and  China's  second  war  with  Great  Britain 
(and  France),  the  second  advance  of  Russia  toward 
Manchuria  was  a  success. 

Shortly  after,  Russia  repeated  the  same  practice  again, 
but  this  time  at  another  corner  of  China  and  not  quite 
so  successfully  as  in  the  Amur  region.  Again  taking  ad- 
vantage of  the  rebellions  in  Chinese  Turkestan,  Russia 
occupied  Kuldja  in  Hi  in  1871,  with  a  proclamation  that 
she  would  withdraw  as  soon  as  China  was  able  to  assume 
the  functions  of  government  in  the  territory.  To  repeat, 
by  1878  General  Tso  Tsung-tang  having  reconquered  the 
rebellious  region,  China  demanded  the  restoration  of  Hi. 


THE  POLICY  OF  RUSSIA  IN  CHINA       97 

By  the  Treaty  of  1879,  concluded  by  Chung  Chow,  Rus- 
sia was  given  the  western  parts  of  Hi,  and  the  impor- 
tant military  passes  of  the  Ticnshan  Mountains,  with  an 
indemnity  of  5,000,000  roubles.  This  treaty  was  re- 
jected by  the  Chinese  Government,  and  the  second  treaty 
was  concluded  by  Marquis  Tseng,  in  1881,  whose  elo- 
quent tongue  and  diplomatic  skill,  together  with  the  fiery 
zeal  of  General  Tso  Tsung-tang  for  military  resistance, 
brought  back  to  China  the  greater  part  of  Hi,  together 
with  the  strategic  passes,  through  the  payment,  however, 
of  an  increased  indemnity  of  9,000,000  roubles.  Thus, 
in  this  case,  Russia,  while  gaining  the  western  strip  of 
Hi,  was,  on  the  whole,  unsuccessful  in  her  expansion  in 
that  part  of  China. 

Bent,  however,  on  her  policy  of  territorial  expansion, 
she  soon  seized  other  opportunities  that  presented  them- 
selves. In  1895,  Japan  had  defeated  China,  and,  by  the 
Treaty  of  Shimonoseki,  had  snatched,  besides  Korea, 
the  Pescadores  and  Formosa,  and  the  Liaotung  Penin- 
sula, including  the  strategic  naval  base,  Port  Arthur. 
When  the  news  of  the  cession  of  Liaotung  reached  his 
ears,  it  was  said  Count  Witte  hurried  to  the  Czar  Nicho- 
las II  and  said  to  him: 

"We  cannot  allow  Japan  to  quit  her  islands  and  get  a 
firm  foothold  upon  the  Asiatic  mainland.  That  would 
effectively  block  our  Far-Eastern  policy  of  peaceful  pene- 
tration." 8 

Therefore,  again  posing  as  the  friend  and  savior  of 
China,  and  in  conjunction  with  Germany  and  France, 
she  forced  Japan  to  retrocede  the-  Liaotung  Peninsula 
to  China.  Besid<  -.  she  arranged  an  immediate  loan  of 
400,000,000  francs  for  China  upon  the  guarantee  of  the 
Imperial  Russian  Government,  thus  relieving  the  Chinese 
Government  of  the  pressing  need  for  the  first  payment 
of  the  Japanese  indemnity  falling  due  at  that  time.     I  l.iv- 


98      POLICIES  OF  GREAT  POWERS  IX  CHINA 

ing  thus   rendered  effective  assistance  to  China  al   her 

hour  of  need,  she  was  read)'  t<>  demand  compensation. 

At  that  time,  the  Trans-Siberian  Railway,  started  in 

1891,  had  just  readied  Lake  Baikal.    The  question  was 

as  to  which  \\a\  it  should  extend, — by  the  kiakhta- Peking 
mute,  or  by  the  Amur  River  route,  or  via  North  Man- 
churia. As  the  Kiakhta-Peking  route  would  surely 
arouse  the  suspicion  of  the  other  Powers,  tnd  as  the  Amur 
River  route  was  confronted  with  great  engineering  diffi- 
culties and  might  also  he  accompanied  by  the  possible 
risk  of  economic  losses,  the  North  Manchuria  route  was 
chosen.  Having  decided  upon  the  route,  the  question 
naturally  followed  as  to  how  to  secure  the  consent  of 
the  I  hinese  Government  to  the  construction  of  this  rail- 
road. 

Opportunely,  the  Czar's  coronation  was  to  take  place 
in  May,  1895.  Li  Hung-chang  was  requested  to  be  sent 
to  attend  the  coronation.  Before  his  departure,  he  had 
cute  red  into  a  tentative  agreement  with  Count  Cassini, 
the  then  Russian  minister  at  Peking,  as  to  the  construc- 
tion of  the  Trans-Siberian  Railway  across  the  plains  of 
North  Manchuria  to  Vladivostok.  While  at  the  coro- 
nation, Count  Witte  convinced  l.i  Hung-chang  that,  to 
render  effective  armed  assistance  to  China  in  case  of  a 
future  struggle  with  Japan,  it  was  necessary  for  Russia 
to  send  her  troops  quickly  to  Manchuria,  and  that,  to  do 
so,  a  railway  would  nerd  to  be  constructed  through  North 
Manchuria  toward  Vladivostok.9  In  the  words  of  Count 
Witte: 

"In  ni\  conference  with  l.i  Hung-chang,  I  dwell  on  the 
service  which  he  had  recently  done  to  his  country.  I 
assured  him  that,  having  proclaimed  the  principle  of 
China's  territorial  integrity,  we  intended  to  adhere  to 
it  ill  the  future;  hut.  to  he  able  to  uphold  this  principle, 
1  argued,  we  must  he  in  a  position,  in  c  -^rucw 

to  render  to  China  armed  assistance.  Such  aid  we  would 
not   be  able   to   render   her  until   both    European    Russia 


THE  POLICY  OF  RUSSIA  IN  CHINA       99 

and   Vladivostok    were   connected   with   China   by    rail, 

our    armed     forces     being     concentrated     in     European 
Russia."  ' 

As  a  result  of  negotiations,  a  secret  agreement  was 
reached  which  was  virtually  a  secret  defensive  alliance.11 
Every  aggression  directed  by  Japan  against  Russia  or 
China  was  to  be  deemed  as  necessarily  bringing  about 
the  immediate  application  of  the  Treaty  of  Alliance 
(Art.  1).  In  this  case,  both  Powers  pledged  to  sup- 
port each  other  with  all  their  military  and  naval  forces 
(Art.  1).  No  treaty  of  peace  could  be  made  with  the 
adversary  without  the  consent  of  the  other  party  (Art.  2). 
During  the  operations  of  the  war.  all  parts  of  China  were 
to  be  open  to  Russian  warships  which  should  receive  the 

sary  help  (Art.  3).  To  facilitate  military  co- 
operation, Russia  was  granted  the  right  to  build  a  rail- 
road across  Heilungkiang  and  Kirin  in  the  direction  of 
Vladivostok  (Art.  4).  The  treaty  was  to  last  for  fif- 
teen years  subject  to  renewal  (Art.  6).  Thus,  by  the 
pretense  of  an  alliance,  Russia  obtained  the  railway  con- 
cession which  was  so  necessary  at  that  time  to  connect 

rn  Siberia  with  European  Russia. 

"It  must  he  confessed  that  in  the  light  of  subsequent 
event-  the  conclusion  of  the  agreement  was  in  the  nature 
of  a  diplomatic  farce.  Russia  was  bent  upon  aggression 
in  Manchuria,  and  the  promise  of  military  assistance  in 

certain  eventualities  was  merely  tendered  as  a  me.r 
proteel        I  hinese  amour  propre."  1J 

Having  entered  into  the  Treaty  of  Alliance,  not  blindly. 
but   with  a   full   knowledge  of    Russia's   ulterior  aim-,   Li 

Hung-chang   wrote,18   in   July.    1895,   shortly   after  the 
coronation  of  the  Czar: 

"Russia  is  to-day  our  greatesl  friend  and  our  most-to- 
ired  enemy.    She  i-  our  friend  because  <  treat  Britain 

and  France  i  friends  also.     She  wishes  to  he  a 


100    POLICIES  OF  GREAT  POWERS  IN  CHINA 

better  friend  than  they.  She  is  our  greatest  enemy,  be- 
cause  what  the-  Russians  call  the  trend  of  her  destiny 
makes  her  so.  She  dominates  all  Northern  Asia  and 
hopes  some  day  to  have  preponderating  influence  in  China. 
She  will  help  us  to  keep  Japan  out,  because  she  herself 
wants  to  get  in." 

No  sooner  had  this  prescience  been  recorded  than  the 
actual  fulfillment  came.  Germany  had  seized  Kiaochau 
in  November.  1897,  which  was  formerly  earmarked  by 
Russia  in  the  so-called  Cassini  Convention.  The  ques- 
tion was  whether  Russia  should  seize  Port  Arthur  and 
Talienwan,  the  ice-free  ports  of  North  China,  which  had 
been  the  goal  of  Russian  territorial  expansion  in  Asia. 
Count  Wittc,  a  believer  in  the  policy  of  peaceful  pene- 
tration which  presupposed  the  integrity  of  China,  re- 
vealed later  that  he  opposed  the  seizure  in  the  Council, 
vehemently  denouncing  it  as  faithless  and  unwise,11  and 
brought  about  the  adverse  vote  of  the  Council.  But 
Muraviov,  the  Russian  Minister  of  Foreign  Affairs  at 
that  time,  who  conceived  the  idea  of  seizing  an  ice-free 
seaport  in  East  Asia,  persuaded  the  Czar  to  take  action 
contrary  to  the  decision  of  the  Council.  In  his  explana- 
tion to  Count  W'itte  for  the  apparent  deviation,  the  Czar 
offered  the  excuse  that  Port  Arthur  and  Talienwan  might 
be  seized  by  Great  Britain,  which  was  later  discovered, 
however,  to  be  unfounded. 

"  'You  know,  Sergey  Yulyevich,'  said  the  emperor  to 
me,  evidently  somewhat  put  out,  'I  have  decided  to  occupy 
Port  Arthur  and  Talienwan.  Our  ships  with  troops 
are  already  on  their  way  there.  Here  is  why  I  have 
taken  this  step.  After  the  conference  the  Foreign  Min- 
ister  reported  to  me  that  according  to  his  information 
British  warships  were  cruising  off  the  ports  in  ques- 
tion, and  that  if  we  did  not  occupy  them  the  British 
would  do  so.'  Muraviov's  information  was,  of  course, 
false,  as  I  later  found  out  from  the  British  Ambassa- 
dor." xi 


THE  POLICY  OF  RUSSIA  IN  CHINA      101 

Thus  Russia  entered  into  the  place  whence  she  had  forced 
Japan  to  recede,  and  thus,  by  this  wanton  seizure,  she 
threw  to  the  winds  the  Treaty  of  Alliance  which,  as  we 
have  seen,  was  merely  used  as  a  cloak  under  which  to 
obtain  the  much  needed  railway  concession  and  proba- 
bly to  achieve  her  program  of  territorial  expansion  in 
North  China. 

No  sooner  had  Port  Arthur  and  Talienwan  been  seized 
than  another  opportunity  presented  itself,  which  offered 
the  irresistible  temptation  for  the  final  consummation  of 
the  Russian  design  on  Manchuria,  and  that  was  the  Boxer 
Uprising  in  1900.  Quite  in  line  with  her  traditional 
policy,  and  again  taking  advantage  of  the  situation,  Rus- 
sia occupied  Manchuria.10  Having  done  so,  her  task 
was  to  secure  the  recognition  of  the  Chinese  Govern- 
ment. The  tactics  employed  in  this  move  were  paralleled 
by  those  of  1860,  when  she  wrested  the  Amur  and 
maritime  regions  from  China.  As  she  then  pretended 
to  be  the  friend  and  savior  of  the  Manchu  Dynasty, 
she  now  repeated  the  same  strategy.  Shortly  after  the 
relief  of  the  allied  legations,  she  proposed,  as  we  have 
observed,  to  the  Powers  to  withdraw  their  diplomatic 
agents  and  military  forces  from  Peking  to  Tientsin, 
and  there  wait  for  negotiation,  which  proposal  was. 
however,  not  accepted  by  the  allies.17  Again,  during  the 
negotiation  she  was  in  favor  of  referring  the  question 
of  the  amount  of  indemnity  to  the  Hague  Tribunal,  and 
disposed  to  be  lenient  and  moderate  in  regard  to  the 
punishment  of  the  principal  culprits. 1M 

Thus  by  posing  as  friend  of  China,  as  she  had  done 
so  many  times  before,  she  expected  that  thereby  she 
could  win  the  cession  of  .Manchuria,  as  she  had  won 
the  Amur  and  the  maritime  regions  in  1.X60.  To  this 
end,  while  the  allies  were  negotiating  the  final  protocol 
oi  peace,  she  entered,  as  we  recall,  into  a  separate  con- 
vention with  the  Tartar  General  in  Mukden.1'-'  virtually 
making.  Manchuria  a  Russian  protectorate.     To   repeat, 


F 


102    POLICIES  OF  GREAT  POWERS  IN  CHINA 

frustrated  by  the  protests  of  Great  Britain,  Japan  and 
the  United  States,  she  entered  into  another  convention 
known  as  the  Lamdorff-Yangyu  Convention,*0  restricting 
the  sovereign  rights  of  China  in  Manchuria  and  North 
China.  In  addition,  Russia  later  demanded  the  conces- 
sion of  the  monopoly  of  the  economic  development  of 
Manchuria  to  he  granted  to  the  Russo-Asiatic  Bank.  All 
these  demands  China  resisted,  and  Great  Britain,  Japan 
and  the   United  States  entered  vigorous  protests.-1 

The  Russian  avalanche  soon,  however,  mi  I  an  effective 
check.  On  January  30,  1902,  the  Anglo-Japanese  Alli- 
ance was  concluded,  aiming  directly  at  the  Russian  ad- 
vance in  Manchuria.  Perceiving  the  peril  of  the  oppo- 
sition, she  at  once  changed  her  front  and  concluded 
the  Treaty  of  March  26,  1(>02.-'-'  promising  to  restore  the 
Shanhaikwan-Newchang-Sinminting  Railway,  and  to 
complete  the  evacuation  of  Manchuria  in  three  succes- 
sive periods  of  six  months  each.  When,  as  we  have; 
known,  the  first  period  of  evacuation  came,  she  fulfilled 
her  pledge,  but  this  only  nominally,  for  centrated 

her  withdrawn  troops  in  the  other  strategic  parts  of 
Manchuria  where  she  was  yet  allowed  to  remain.  When, 
however,  the  second  period  of  evacuation  was  due.  she 
openly  refused  to  effect  the  withdrawal,  and  in  addition, 

Qted  to  China,  as  conditions  to  further  evacua 
Seven  Articles,-3  demanding,  inter  alia,  the  non- 
alienation  of  Manchuria  and  the  closing  of  Manchuria 
against  the  economic  enterprises  of  any  other  nation  but 
Russia.  What  was  worse,  she  concentrated  her  troops 
at  Liaoyang,  occupied  Fenghangching  and  Antung,  and 
,-ent  troops  across  the  Yaln  River  into  Korea,  thus 
threatening  even  the  safety  of  Korea  and  Japan. 

At  this  juncture,  as  we  recall,  Japan  stepped  into  the 
arena  and  demanded,   on   AugUSl    12.    1903,    inter  alia,   a 

mutual  undertaking  to  respect  the  integrity  of  China  and 
Korea,  and  the  reciprocal  recognition  of  Japan's  pre- 
ponderating influence  in  Korea  and  Ri  pedal  in- 


THE  POLICY  OF  RUSSIA  IN  CHINA      103 

terest  in  Manchuria.24  Throughout  the  negotiation,  Rus- 
sia was  willing  to  concede  to  Japan  the  recognition  of 

her  preponderance  in  Korea,  but  she  insisted  on  Japan's 
recognition  of  Manchuria  as  being  outside  her  sphere  of 
influence,  and  refused  to  give  the  pledge,  even  to  the 
very  last  moments  of  the  negotiations,  to  respect  the 
rity  of  China  in  Manchuria.  This  refusal  on  the 
part  of  Russia  clearly  and  conclusively  evidenced  Rus- 
sia's intention  to  absorb  or  annex  Manchuria.  To  this 
effect  John  Hay's  Utter  to  President  Roosevelt,  on  May 
12.   1903,   further  bears  indirect  testimony: 

"I  have  intimated  to  Cassini  that  the  inevitable  result 
of  the  present  course  of  :i  n  would  1  izure 

by  different  powers  of  different  provinces  in  China,  and 
the  accomplishment  of  the  dismemberment  of  the  Em- 
He  shouts  in  reply.  'This  is  already  done.     China 
is  dismembered  and  we  are  entitled  to  our  share.'  "  - ' 

The  Russo-Japanese  War  (1904-5)  that  ensued 
resulted,    it   is    to   be    remembered,    in   addition   to   the 

ference  to  Japan  of  the  lease  of  Port  Arthur  and 
Talienwan,  and  of  the  southern  section  of  the  Russian- 
Manchurian  Railway  from  Changchun  to  Port  Arthur, 
in  putting  an  effective  check  on  tl  e  Russian  advance  in 
Manchuria.  Having  learned  through  the  painful  experi- 
ence of  defeat,  the  police  of  Russia  thenceforth  under- 
went a  change  from  an  offensive  and  aggressive  to  a 

iatory  and  defensive  procedure  more  on  the 

rvation  of  what  she  had  than  on  the  recovery  of 
what  was  ires  of  defense.     The  Amur 

Railway  Bill  was  hastily  passed  by  the  Russian  Duma, 
and  the  railway  was  constructed  at  great  cost  to  the 
Government,— more  for  strategic  purposes  than  for  com- 

il.     Thus  the  (  hin<  n  Railway  was  made 

the  first   line  of  d  the  Amur   River  the  second, 

and  the  Amur  Railway  the  third.     Besides,  Vladivi 

was  developed    into   a    first  class    fortress    and    naval    sta- 


104    POLICIES  OF  GREAT  POWERS  IN  CHINA 

tion.  The  Silurian  Railway  track  was  doubled,  thus 
increasing  its  capacity  for  transportation. 

In  addition  to  these  defensive  measures,  she  also 
adopted  a  more  conciliatory  attitude  in  her  dealings 
with  China  and  Japan.  In  the  Harbin  case  of  1907, 
although  she  had  at  first  insisted  on  the  Russian  ad- 
ministration of  the  municipality  in  that  place,  she  never- 
theless came  to  a  compromise  with  China  in  1909,  and 
arranged  for  partnership  and  cooperation  on  a  basis  of 
equality. -i:  Regarding  Japan,  she  also  entertained  a  more 
chastened  spirit.  She  entered  into  the  first  agreement 
with  Japan  on  July  30,  1907, 27  pledging  to  preserve  the 
status  quo  of  their  respective  special  interests  in  China, 
and  later  on  July  4,  1910,28  promising  mutual  cooperation 
in  case  of  foreign  interference  with  their  respective  in- 
terests in  Manchuria,  and  lastly,  in  July,  1916,  forming 
a  secret  alliance  with  Japan.29130 

Pursuing  this  defensive  policy,  Russia  soon  seized 
another  opportunity  to  strengthen  further  her  own  de- 
fense. In  1911  the  Revolution  had  plunged  China  into 
civil  turmoil.  Taking  advantage  of  the  situation,  she 
detached  Outer  Mongolia  from  China  and  made  it  a 
buffer  state  between  China  and  Russia, — though  nom- 
inally under  the  suzerainty  of  China.  To  repeat  what 
has  been  said,  on  November  3,  1912, 31  she  concluded  a 
convention  with  Mongolia,  pledging  to  assist  the  latter 
in  maintaining  the  regime  of  autonomy,  thus  breaking 
away  from  the  grip  of  the  Peking  Government,  and 
putting  a  prohibition  on  the  admission  of  Chinese  troops 
and  colonization  of  the  land  by  the  Chinese.  A  year 
later,  by  the  convention  with  China,  on  November  5, 
1913,M  she  exacted  from  China  the  recognition  of  the 
autonomy  of  Outer  Mongolia  and  pledged  not  to  send 
any  troops  thereto,  nor  to  colonize  the  territory.  By  a 
subsequent  agreement,  on  September  30,  1914,33  she 
obligated  (  >Uter  Mongolia  not  to  grant  any  railway  con- 
cession in  Outer  Mongolia  without  first  consulting  Rus- 


THE  POLICY  OF  RUSSIA  IN  CHINA      105 

sia.  Finally,  to  complete  the  entire  process  of  making 
a  buffer  state  of  Outer  Mongolia,  and  to  bring  about 
a  definite  understanding  concerning  the  relationship  be- 
tween Russia,  Outer  Mongolia  and  China,  the  tripartite 
agreement  was  concluded,  on  June  7,  191 5. 34  Russia  and 
China  recognized  the  autonomy  of  Outer  Mongolia 
(Art.  2),  while  Outer  Mongolia  recognized  the  Sino- 
Russian  Convention  of  November  5,  1913  (Art.  1)  and 
also  the  suzerainty  of  China  (Art.  2).  Outer  Mon- 
golia was  to  have  no  right  to  conclude  any  international 
treaty  with  foreign  powers  respecting  political  and  ter- 
ritorial questions  (Art.  3).  As  regards  questions  of  a 
political  and  territorial  nature  in  Outer  Mongolia,  the 
Chinese  Government  was  obligated  to  come  to  an  agree- 
ment with  the  Russian  Government  through  negotiation 
in  which  the  authorities  of  Outer  Mongolia  should  par- 
ticipate (Art.  3).  Thus,  by  these  successive  conven- 
tions, Russia  made  Outer  Mongolia  a  buffer  state  be- 
tween China  and  herself.  By  prohibiting  Chinese  coloni- 
zation and  military  establishment  in  Outer  Mongolia,  she 
succeeded  in  holding  off  the  contact  and  therefore  the 
conflict  between  the  Chinese  and  the  Russians  at  arm's 
length.  By  requiring  mutual  agreement  as  to  questions 
of  a  political  and  territorial  nature  in  Outer  Mongolia, 
she  established  herself  as  a  co-overlord  or  joint  suzerain 
over  Outer  Mongolia,  and  further  paved  the  way  for 
future  expansion  or  annexation,  the  opportunity  present- 
ing itself,  as  in  Japan's  case  in  1885,  when  she  required 
of  China  previous  notice  for  the  dispatch  of  troops  to 
Korea. 

When,  however,  the  Soviet  Revolution  of  1917  came, 
the  Russian  policy  was  fundamentally  changed.  As  the 
Soviet  rule  was  the  antithesis  of  the  Czar  regime,  so 
the  policy  of  the  Russian  Soviet  Government  in  China 
was  just  the  opposite  of  the  C/.ar  Government.  Instead 
of  seeking  territorial,  or  political,  or  economic  gains,  it 
sought  justice  and  restitution  in  China.     Instead  of  hold- 


106    POLICIES  OF  GREAT  POWERS  IX  CHINA 

hina  a1  a  distance,  it  attempted  to  befriend  China. 
In  the  telegram  of  March  26,  1920,  the  Soviel  Minister 
of  Foreign  Affairs  offered  to  the  Chinese  Government** 
the  restoration  of  the  Chinese  Eastern  Railway,  the  can- 
cellation of  the  Boxer  indemnity,  the  abolition  of  the 
Russian  extraterritorial  rights  in  China,  and  the  abroga- 
tion of  all  those  treaties,  the  object  of  which  was  to 
encroach  upon  the  Chinese  territorial  rights."  The  Soviel 
telegram  read  In  part  as  follow.-: 

".  .  .  The  Soviet  Government  offered  at  that  time  to 
Government  to  enter  into  negotiations  on 
the  subject  of  annulling  the  Treaty  of  1896,  the  Protocol 
of  Peking,  1901,  and  all  the  agreements  concluded  with 
Japan  from  VX)7  to  1916.  That  is  to  say  to  return  to 
the  Chinese  people  all  that  has  been  taken  from  them  by 
tin-  government  of  the  Czar,  either  by  authority  of,  or 
through  an  understanding  with  Japan  and  the  Allies. 

"The  government  of  the  Soviet  returns  to  the  Chinese 
people  without  demanding  any  kind  of  compensation  the 
Chinese  Eastern  Railway  as  well  as  all  the  concessions, 
mineral,  forestry,  gold  mines  and  others,  which  have  been 
snatched  from  them  by  the  government  of  the  Czar,  the 
government  <>i'  Kerensky  and  the  brigands,  Holtvath, 
SemenolT.  Koltchak,  the  Russian  ex-generals,  merchants 
and  capitalists. 

"The  governmenl  of  the  Soviet  renounce-  the  con- 
tribution due  from  China  for  the  insurrection  of  lioxers 
00.   .   .   . 

"Tin    gov<    nment  of  So\iet  abolishes  all  special  privi- 

.  all  the  concessions  to  Russian  trade-men  in  Chinese 

territory.     No    Russian    official,    priest    or    missionary, 

should  dare  interfere  in  Chinese  affairs.    If  they  commit 

a  crime-,  they  ought  to  be  judged  according  to  local  laws 

and    local   justice.   .   .   . 

"Beyond  these  principal  points,  the  government  of 
Soviet  is  read  otiate  with  the  Chinese  people  rep- 

resented  by  its  plenipotentiary,  all  other  questions,  and 
to  liquidate   once    for  all.   all    the  acts  of   violence   and 


THE  POLICY  OF  RUSSIA  IN  CHINA      107 

injustice  which  have  been  committed  against  China  by 
the  former  Russian  Governments  in  concert  with  Japan 
and  the  Allies."  Ba 

This  telegram  China  did  not  answer,  having  as  yet 
not  recognized  Soviet  Russia,  but  following  this,  by  a 
Presidential     Mandate    of  iber    23.     1920,;t!)    the 

Chinese  Government  terminated  all  official  relations  with 
the  old  regime,  withholding  official  recognition  from 
the  Russian  minister  at  Peking  and  the  Russian  Consuls 
in  China,  and  proclaiming  that  China  would  act  as  tem- 
porary trustee  of  Russian  interests  in  China,  pending  the 
establishment  of  a  National  Government  in  Russia.  This, 
however,  did  not  abrogate  the  Sino-Russian  Treaties,  nor 
cancel  the  extraterritorial  rights  of  the  Russians.40 

Tims,  we  can  conclude,  in  recapitulation,  that  the  policy 
of  Russia  up  to  the  Russo-Japanese  War,  was  pre- 
eminently one  of  territorial  expansion  under  the  guise 
of  friendship  and  alliance  and  the  adv;  of  critical 

opportunities,  as  evidenced  by  the  session  of  the  Amur 
and  Maritime  regions  in  1858  and  1860,  and  the  acquisi- 
tion of  the  western  parts  of  Hi  (1871-1881),  and  the 
seizure  of  Port  Arthur  and  Talienwan  during  the  gen- 
eral scramble  of  1898.  and  finally  the  attempt  to  absorb 
Manchuria  during  and  following  the  Boxer  Uprising. 
We  can  also  safely  say  that  after  the  Russo-Japanese 
War,  the  policy  of  Russia  in  China  was  mainly  con- 
ciliatory and  defensive,  changing,  however,  to  agj 
siveness  only  during  and  following  the  Chinese  Revo- 
lution, as  evidenced  by  its  creation  of  Outer  Mongolia 
as  a  buffer  state.  It  is  to  be  observed,  however,  that 
when  the  Soviel  Revolution  came,  the  Russian  policy 
was  radically  changed  into  that  of  International  Broth- 
erhood and  Soviet  Propaganda.  As  to  what  the  future 
of  the  Russian  policy  may  be,  it  will  depend  largely  upon 
the  duration  of  the  So\  iel  n  crime. 


108    POLICIES  OF  GREAT  POWERS  IN  CHINA 


NOTES  TO  CHAPTER  V 

1.  Dillon,  The  Eclipse  of  Russia,  p.  224. 

2.  E.  J.  Harrison,  Peace  or  War  East  of  Baikal?,  p.  21. 

3.  Ibid.,  pp.  23-25. 

4.  Lancelot  Lawton,  The  Empires  of  the  Far  East,  Vol.  II, 
p.  1291. 

5.  Ibid.,  Vol.  II,  p.  1291. 

6.  Morse,  The  International  Relations  of  the  Chinese  Empire. 
Vol.   1.  p.  477. 

7.  Hertslet,  Vol.  I,  Xo.  82,  p.  461  et  seq. 

8.  Patrick  Gallagher,  America's  Aims  and  Asia'-;  Aspirations, 
p.  130;  cf.  Count  Witte,  My  Dealings  with  the  Li  Hung  Chang, 
World's  Work.  January,   1921. 

9.  Count  Witte.  My  Dealings  with  Li  Hung  Chang.  Article 
published  in  the  World's  Work,  January,  1921,  p.  302  et  seq. 

10.  Ibid.,  p.  302. 

11.  Patrick  Gallagher,  op.  cit.,  App.  B.,  pp.  456-457;  Lancelot 
Lawton,  op.  cit.,  Vol.  II,  pp.  1295-1296;  Far  Eastern  Review, 
January,  1921,  p.  23. 

12.  Lancelot  Lawton,  op.  cit.,  Vol.  II,  p.  1296. 

13.  W.  F.  Mannix,  Memoirs  of  Li  Hung  Chang,  1913,  p.  118. 

14.  Count  Witte,  My  Dealings  with  Li  Hung  Chang,  p.  307 
et  seq. 

15.  Ibid,  p.  307. 

16.  Morse,  op.  cit.,  Vol.  Ill,  p.  321. 

17.  Ibid..  VoL  III,  p.  305. 

18.  Ibid..  Vol.  111.  p.  341  et  seq. 

19.  Asakawa,  Russo-Japanese  Conflict,  pp.  166-167,  China,  No. 
2,  1904,  No.  5,  January  4,  1901  ;  vide  supra,  Chapter  on  the  Inter- 
national Struggle  for  Concessions. 

20.  Asakawa,  op.  cit.,  p.  174,  The  Times,  February  28,  1901  ; 
China,  Xo.  2.  1004.  X...  6,  Xo.  14.  No.  25  and  No.  42; 'vide  supra, 
Chapter  on  the  International  Struggle  for  Concessions. 

21.  Vide  supra,  Chapter  on  tin-  International  Struggle  for  Con- 
cessions. 

22.  Hertslet,  op.  cit.,  No.  90,  pp.  509-512. 

23.  Count  Okuma,  Fifty  Years  of  Japan,  p.  117;  Japan's  For- 
('•.II  Relations,  by  T.  Soyishima;  Asakawa,  op.  cit.,  pp.  242-244; 
China,  Xo.  _',  1904,  Xo.  94. 

_'4.    Asakawa,  op.  cit,  pp.  303-304;  vide  supra,  Chapter  on  the 
International   Struggle   for  Concessions.     Tor  a  full  account  of 
the   Russo-Japanese   Negotiations  leading  to  the  war,  see  Asa- 
kawa, The  Russo-Japanese  Conflict,  pp.  _"><i  362. 
25.    W.  R.  Thayer,  The  Life  of  John  Hay.  VoL  II.  p.  368. 

Lancelot   Lawton,  op.  cit.,  Vol.  II.  p.  1300  el 
27.    MacMurray,  Treaties  with  and  Concerning  China,  1907/11. 

MacMurray,  1910/1. 
29.    MacMurray,  1916/9. 


THE  POLICY  OF  RUSSIA  IN  CHINA      109 

30.  By  these  agreements  and  by  later  actions,  it  seems  to  be 
quite  clear  and  certain  that  an  understanding  has  been  reached 
that  the  sphere  of  influence  of  Russia  in  China  should  be  North 
Manchuria  and  Outer  Mongolia,  while  that  of  Japan  in  China 
should  be  South  Manchuria  and  Eastern  Inner  Mongolia.  The 
rejection  of  the  neutralization  plan  of  Knox  evidenced  that 
Russia,  in  connivance  with  Japan,  meant  to  dominate  her  sphere 
of  influence  and  to  make  them  as  exclusive  as  possible. 

31.  MacM array,  1912/12. 

32.  MacMurray,  1913/11. 

33.  MacMurray,  1914/12. 

34.  MacMurray,  1915/10. 

35.  II.  K.  Tong,  Russian  Soviet  would  Befriend  China,  article 
in  Millard's  Review,  January  5,  1920,  pp.  24-26. 

36.  Following  the  telegram  came  the  Soviet  Commission  for 
the  negotiation  of  new  treaties,  who  were  accorded  due  courtesy, 
but  who  were  declined  to  consider  any  overtures. 

37.  H.  K.  Tong,  Russian  Soviet  would  Befriend  China,  p.  25. 

38.  The  authenticity  of  this  soviet  telegram  has  yet  to  be 
established. 

39.  H.  K.  Tong,  The  Xew  Development  of  Sino-Russian  Re- 
lations, article  in  Millard's  Review,  October  9,  1920,  pp.  281-282. 

40.  H.  K.  Tong,  The  New  Development  of  Sino-Russian  Re- 
lations, pp.  281-282.  "  The  Russian  Minister  and  his  subordi- 
nates and  the  consuls  from  the  old  Russian  Government  have 
lost  their  official  status  long  since  the  outbreak  of  the  Russian 
Revolution.  They  cannot  represent  the  Russia  of  to-day.  .  .  . 
As  the  Russian  Alinister  has  been  verbally  informed  of  the 
policy  which  it  is  the  intention  of  this  Government  to  pursue,  it 
is,  therefore,  hereby  proclaimed  that  recognition  of  the  Russian 
Minister  and  his  subordinates  as  well  as  the  Russian  Consuls 
from  the  old   Russian  Government  is  withheld  forthwith. 

"...  But  the  friendly  relationship  hitherto  existing  between 
the  two  countries  in  regard  to  the  treatment  of  Russian  citizens 
will  be  maintained.  All  respectable  Russian  citizens  and  their 
private  property  will  be  protected  as  usual,  provided  they  strictly 
observe  the  rules  in  force  in  this  country,  which  will  follow  the 
footsteps  of  the  allied  powers  and  maintain  a  neutral  attitude 
toward  the  political  troubles  in  Russia.  .    .    ." 


VI 
THE  POLICY  OF  FRANCE  IX  CHINA 

The  policy  of  France  in  China  has  been  to  create  a 
colonial  base  on  the  border  of  China,  to  establish  a 
sphere  of  influence  in  China  adjoining  her  colonial  pos- 
session, and  to  cooperate  with  her  allies  in  the  affairs 
of  China.  To  create  a  colonial  base,  she  established  her 
protectorate  over  Annam  and  Tonkin  (1883-1885).  To 
institute  a  sphere  of  influence  in  the  provinces  of  China 
bordering  on  Tonkin,  she  exacted  the  declaration  of 
non-alienation  of  these  provinces — Yunnan,  Kw.v 
and  Kwangtung — and  also  extended  her  Tonkin  railway 
into  Yunnan,  penetrating  the  southwestern  corner  of 
China.  In  the  international  affairs  of  China,  she  gen- 
erally adopted  the  policy  of  cooperation  with  her  allies. 

The  policy  of  France  in  China  has  been  largely  a  re- 
flection of  her  policy  in  European  politics.  Her  actions 
in  China  ware  either  the  direct  products  or  parallels 
of  her  European  policies.  She  joined  Great  Britain 
in  the  second  war  on  China  (1857-1860),  largely  as  a 
continuation  to  the  allied  cooperation  between  Great 
Britain  and  France  in  the  Crimean  War  (1854-1856). 
She  annexed  Cochin-China  (1858-1867)  mainly  under 
the  inspiration  of  Napoleon  HI,  who  pursued  a  policy  of 
territorial   aggrandizement.      She   receded   and   became 

less  aggressive  from  1871  to  1880,  when  she  recuperated 
her  strength  from  the  injuries  of  the  franco- Prussian 
War.      .After  this,   from    1880  to   1904,  she  resumed   her 

colonial  activities  and  entered  into  the  general  scramble 
tor  colonial  possessions  and  other  concessions  which  so 
characterized  the  close  of  the  nineteenth  century.  She 
established     her    protectorate    over    Annam     in     1883, 

110 


THE  POLICY  OF  FRANCE  IN  CHINA     111 

snatched  Tonkin  from  China  in  the  same  year,  and 
marked  the  three  provinces  of  China  bordering  on  Ton- 
kin as  her  sphere  of  influence.  The  dual  alliance  of 
1891  brought  about  her  cooperation,  in  the  affairs  of 
China,  with  Russia;  her  Entente  Cordiale  of  1904.  with 
Great  Britain;  and  her  participation  in  the  new  Inter- 
national Ranking  Consortium,  with  Great  Britain  and 
the  United  States.  Thus  her  Oriental  policies  were,  and 
are  clearly,  the   reflections  of  her  European  policies. 

The  first  step,  as  we  have  seen,  in  the  program  of 
France  in  Far  East  was  to  establish  a  colonial  foothold 
upon  which  she  could  base  her  power  and  from  which 
she  could  tap  the  wealth  of  China.  Accordingly,  from 
1858  to  1867,  after  some  intermittent  fighting  with 
Annam,  she  annexed  Cochin-China  and  also  established 
a  protectorate  over  Cambodia.  Shortly  after  the  Franco- 
Prussian  War,  while  not  yet  recovered  from  the  disas- 
trous effects  thereof,  as  we  recall,  she  entered  into  a 
treaty  of  alliance  with  Annam  on  March  15,  1874,1  rec- 
ognizing the  independence  of  Annam  and  extending  to 
her  the  protection  of  a  French  .alliance,  thus  pursuing 
the  same  policy  of  Russia  of  absorbing  a  weaker  state 
under  the  guise  of  a  protecting  alliance.  Article  One 
provided : 

"II  y  aura,  paix,  amitie  et  alliance  perpetuelles  entre 
la  France  et  le  Royaume  d'Annam."  Article  Two 
stipulated : 

"Son  Excellence  te  President  de  la  Republique  fran- 
chise, reconnaissanl  la  souverainete*  du  Roi  de  ['Annam 
et  -"ii  entii  re  independence,  vis-a-vis  de  toute  puissance 
etrang&re,  quelle  qu'elle  soit,  lui  promel  aide  et  a^M- 
ance  et  s'engage  a  lui  donner  sur  sa  demande,  et  gratuite- 
ment,  I'appui  necessaire  pour  tnaintenir  dans  sea  Stats, 
I'ordre  et  la  tranquillite,  pour  le  d£pendre  contre  toute 

atta<|ue.    et     pour    delruire    la    pirateric    qui    de>ole    line 
partie  d< 


112    POLICIES  OF  GREAT  POWERS  IN  CHINA 

In  addition,  Annani  pledged  not  to  enter  into  any 
treaties  not  in  accord  with  the  one  made  between  France 
and  Annam  and  without  informing  the  French  Govern- 
ment, while  France  remitted  the  balance  of  the  war  in- 
demnity.- Thus,  by  this  treaty  of  alliance,  France  de- 
tached Annam  from  her  traditional  relation  with  China, 
and  made  her  an  independent  state  under  the  pro- 
tection of  the  French  Alliance,  thus  virtually  supplant- 
ing China's  suzerainty. 

This  treaty  of  alliance,  however,  was  a  mere  prelude 
to  the  eventual  establishment  of  the  French  protecto- 
rate. Consequently,  on  June  6,  1884,  when  the  French 
forces  had  already  come  into  conflict  with  the  Chinese 
garrisons  in  Tonkin,  France  imposed  upon  Annam  the 
treaty  of  Hue,  which  definitely  established  the  French 
protectorate  over  Annam.     Article  One  reads : 

"L' Annam  reconnait  et  accepte  le  Protectorat  de  la 
France,  la  France  representera  1' Annam  dans  toutes  ses 
Relations  Exterieures.  Les  Annamites  a  l'etranger 
seront  places  sous  la  protections  de  la  France." 

A  Resident  General,  representing  the  Government  of 
France,  was  to  assume  the  functions  of  the  protectorate 
and  to  attend  to  the  foreign  relations  of  Annam  with- 
out, however,  interfering  with  the  local  administration 
of  the  provinces  (Art.  5).  Assistant  Residents  under 
the  order  of  the  Resident  General  were  to  be  placed  in 
Tonkin   (Art.  6).3 

The  colonial  base  having  thus  being  created,  her  next 
step  was  to  establish  a  sphere  of  influence,  wherein  she 
could  exploit  the  wealth  of  China.  It  will  be  recalled, 
as  a  reward  for  her  service  in  the  tripartite  intervention 
for  the  retrocession  of  Liaotung,  she  secured,  on  June 
20,  1895,  besides  certain  territorial  advantages  on  the 
frontier  of  Tonkin,4  the  opening  to  trade  °  of  Lungchow, 


THE  POLICY  OF  FRANCE  IN  CHINA     113 

Mengtze,  Ho-K'eou  and  Szemao  (Art.  2  and  3),  special 
mining  privileges  in  Yunnan.  Kwangsi,  Kwangtung 
(Art.  5)  and  the  right  of  extension  of  the  Annam 
railway  into  China  (Art.  5).°  Following  the  general 
scramble  for  leases  and  concessions,  she  obtained  the 
lease  of  Kwangchowan,  the  right  of  a  railway  from 
Tonkin  to  Yunnan,  and  the  privilege  of  the  appoint- 
ment of  a  Frenchman  to  head  the  Chinese  postal  serv- 
ice,7 and  also  the  concession  of  a  railway  from  Kwang- 
chowan to  Leichow  or  to  a  point  in  the  neighborhood 
thereof  (Art.  7).H  Besides,  she  procured  from  China 
the  declaration  of  non-alienation  of  the  Island  of 
Hainan 9  and  of  the  territory  bordering  on  Tonkin.10 
Later,  on  September  26,  1914,11  she  received  the  note 
of  the  Chinese  Foreign  Minister  giving  preference  to 
French  nationals  in  railway  and  mining  enterprises  in 
Kwangsi. 

Side  by  side  with  her  policy  of  creating  a  sphere  of 
influence  in  Southwestern  China  was  her  policy  of 
working  hand  in  hand  with  her  ally  in  the  North.  In 
almost  all  affairs  of  importance,  she  marched  shoulder 
to  shoulder  with  Russia.  She  joined  Russia  in  1895  in 
the  tripartite  intervention  for  the  retrocession  of  Liao- 
tung.  She  practically  made  the  entire  flotation  of  the 
Russo-French  loan  of  400,000,000  francs  under  the 
guarantee  of  the  Russian  Government  for  the  relii 
China.  During  the  Boxer  Uprising  she  accepted  the 
Russian  proposal  to  withdraw  the  allied  diplomatic 
agents  and  the  military  forces  from  Peking  to  Tientsin 
to  wait  for  the  negotiation  of  peace,  which  was  rejected 
generally  by  the  other  allied  powers.11  In  response  to 
the  Anglo-Japanese  Alliance,  she  and  Russia  jointly 
made  a  counter-declaration  on  March  3,  1902,1'  pro- 
claiming that  the  foundation  of  the  French  Russian 
Policy  in  the  Far  Easl  was  the  same  as  the  principles 
embodied  in  the  Anglo- Japanese  Alliance,  but  reserving 


114    POLICIES  OF  GREAT  POWERS  IX  CHINA 

the  right  of  action  in  "the  contingency  of  either  the  ag- 
gressive anion  of  third  powers  or  renewed  disturbances 
in  China."  During  the  Russo-Japanese  War  that  en- 
sued, though  neutral,  she  extended  her  hospitality  to  the 
Russian  fleet  en  route  to  <  )rient.  When  after  the  war, 
however,  Russia  and  Japan  came  to  an  agreement  in 
1907,  she  likewise  followed  and  entered  into  an  under- 
standing with  Japan  on  June  10,  W0714  engaging  to 
support  "the  territorial  rights  of  the  two  contracting 
parties  in  the  continent  of  Asia."  In  reply  to  the  neu- 
tralization proposal  of  Knox,18  while  approving  the 
principles  underlying  the  plan,  she  declined  to  adhere 
thereto,  "unless  hy  a  common  accord  with  the  two  pow- 
ers (Russia  and  Japan)  most  interested  had  been  dis- 
posed to  renounce  the  contract  rights  in  Manchuria  and 
to  side  with  the  .American  suggestion." 

As  a  further  evidence  of  the  French  policy  of  co- 
operation with  Russia  in  the  Far  East,  M.  A.  Gerard, 
the  French  Minister  in  Peking  from  1894  to  1897,  wrote 
in  his  "Ma  Mission  En  Chine"  the  following  passage 
regarding  the  instructions  he  received  of  cooperating 
with   Russia  : 


"Mes  Instructions  me  preserivaient  enfin,  apres 
quelques  recommendations  speciales  <ur  un  certain 
nombre  d'affaires  courantes  de  ne  jamais  perdre  de  vu, 
dan-  les  demarches  que  J'aurais  a  faire  et  dans  Taction 
que  J'aurais  a  exercer  a  l'ekin.  le  concert  et  l'union  qu'il 
convenait  de  maintenir  avec  Faction  de  la  Russie,  notre 
alliee.  Les  interets  de  la  Russie  en  Extreme — Orient 
etant  plus  etendus  et  plus  considerables  que  les  notres, 
il  etait  nature!  et  necessaire  que  noire  concourse  lui  fut 
assure  et  que  le  caractere  de  notre  alliance  fut  manifeste 
■  I  la  <  nine  elle-meme  et  aux  puisances  represent 
Peking.  Les  evenements  dont  I'Extreme  Orient  allait 
ft  re  la  theatre  aelnveraient  dedonner  a  cette  clause 
finale  de  mes  instructions  toute  la  signification  et  toute 
la  portee  que  v  6taienl  contenues.     IF  allaient  etre  la 


THE  POLICY  OF  FRANCE  IN  CHINA     115 

premiere  mise  a  I'epreuve  la  premiere  de  monstration 
de  1' alliance  franco-russe  et  nous  fournir  ainsi  l'occas- 
sion  de  notre  premiere   victoire." 

Besides  diplomatic  cooperation,  France  attempted  to 
connect  her  own  interests  in  Southwestern  China  with 
the  Russian  interests  in  North  China  by  means  of  rail- 
ways. Endeavoring  to  grasp  the  hand  of  her  northern 
ally  across  the  plains  of  China  and  in  conjunction  with 
Russia,  she  backed  the  Belgian  syndicate  to  secure  the 
concession  of  the  Peking-Hankow  railway,  and  when 
the  loan  was  floated  in  Paris  and  Brussels,  the  French 
subscribed  nearly  four-fifths  of  the  loan,  while  the  Bel- 
gians secured  only  one-fifth,  thus  showing  clearly  that 
the  line  was  Belgian  only  in  name.17 

Besides,  her  financial  agents  together  with  the  Bel- 
gians also  attempted  to  gain  control  of  the  Canton- 
Hankow  Railway,  which  was  conceded  to  American 
capitalists,  and  wen  about  to  succeed  in  taking  charge 
of  the  road  when  the  Chinese  Government  intervened 
and  demanded  the  cancellation  of  the  concession.1  * 
Thus,  had  the  French,  and  Belgian  interests  succeeded 
in  gaining  the  control  of  tlu-  Canton-Hankow  Railway. 
they  would  have  controlled,  in  addition  to  the  Peking- 
Hankow  Railway,  the  entire  North  and  South  trunk  line 
running  from  Peking  through  Hankow  to  Canton,  thus 
linking  up  the  Russian  interests  in  North  and  the 
French  interest  in  South,  under  the  cloak  of  the  neu- 
tralized Belgium.  1'arailel  to  the  Peking-Hankow- 
Canton  line.  France  and  Belgium,  through  their  respec- 
tive financial  agencies,  obtained  the  concession  of  the 
Tatung-Chengtu  railway,  on  July  22,  1913.19  In  the 
mxl  year,  on  January  21,  L914,  France  secured  the 
contract  for  the  Ching-Yu  railway  running  through 
Yanchow-Yunnanfu-Suifu-Changking.30  Thus,  by  the 
acquisition  of  these  two  con<  .  and.  in  addition, 

the   French   interests   in   the   Hankow-Szechuan   line, 


116    POLICIES  OF  GREAT  POWERS  IN  CHINA 

running  from  Tatting  near  Mongolia  to  Chengtu  and 
from   Chengtu   to  Chungking  and    from   Chungking  to 

Yunnanfu, — France  extended  her  hands  northward 
across  Western  China  until  she  clasped  those  of  Russia 
in  Mongolia  and  North  China. 

The  Entente  Cordiale  of  1904,  however,  added  one 
more  ally  to  France  in  the  Orient.  Hitherto  she  had 
cooperated  mainly  with  Russia.  She  had  now  to  work, 
not  only  with  Russia,  but  also  with  her  new  ally, — 
Great  Britain.  The  Entente  Cordiale  manifested  itself 
in  the  agreement  of  cooperation  between  the  British 
group  of  syndicates  (the  British  and  the  Chinese  Cor- 
poration, Limited,  Chinese  Central  Railways,  Limited, 
etc.)  and  the  French  group  (Banque  de  L'Indo-Chine, 
etc.)  on  October  2,  1905 ; 21  and  later  in  the  contract  for 
the  Pukow-Sinyang  Railway  signed  on  November  14, 
1913,"  the  benefits  of  which  the  French  shareholders 
received  in  their  due  proportion.  Again,  in  the  case  of 
the  Hukuang  loan,  the  Entente  Cordiale  paved  the  way 
for  the  amicable  admission  of  the  French  interests: 
France  was  to  share  equally  in  the  four  power  loan 
(Art.  2)  and  to  appoint  the  chief  engineer  to  the  last 
section  of  600  kilometers  to  Chengtu  on  the  Hankow- 
Chengtu  line  (Art.  4).'-'3 

The  Great  War,  however,  changed  the  diplomatic 
affiliations  of  France.  The  entrance  of  the  United 
States  into  the  struggle  gave  France  a  new  ally  or  rather 
associate  in  the  war;  and  the  formation  of  the  New 
International  Banking  Consortium  in  May,  1918,  fur- 
ther  facilitated  the  future  cooperation  between  France 
and  the  United  States.  The  Soviet  Revolution  of  1917, 
however,  brought  to  pass  the  loss  of  Czaristic  Russia 
as  the  ally  of  France,  and  what  is  wor.se,  changed 
France  from  being  a  warm,  loyal  friend  to  a  bitter  op- 
ponent to  Russia,  largely  because  of  the  repudiation  by 


THE  POLICY  OF  FRANCE  IN  CHINA     117 

Soviet  Russia  of  her  French  debts.  As  a  manifestation 
of  this  hostile  opposition,  the  French  Government  ad- 
vised China  not  to  enter  into  commercial  agreements 
with  the  Russian  delegation  from  Verhne  Udinsk.24 

Now  that  the  war  is  over,  the  question  naturally 
arises:  What  will  be  the  policy  of  France  in  China? 
On  the  one  hand,  it  is  reported,  though  without  authentic 
evidence,  that  she  has  entered  into  the  tripartite  under- 
standing with  Great  Britain  and  Japan,  reserving  Yun- 
nan, Kwangsi  and  the  Western  part  of  Kwangtung  as 
her  region  of  exploitation.  She  is  said  to  have  been 
attracted  by  the  idea  of  the  tripartite  division  of  China 
as  a  possible  way  of  recoupment  for  the  losses  of  the 
war  and  also  for  the  collection  of  the  French  pre-war 
investments  in  Russia. 

''It  was  so  secret  that  M.  Pitchon,  then  Foreign  Min- 
ister for  Foreign  Affairs,  thought  that  an  imperialistic 
policy  is  the  way  to  recoup  the  position  of  France  in  the 
world."  25 

On  the  other  hand,  it  is  generally  believed  that  France 
will  cooperate  with  her  allies  in  the  war, — especially 
Great  Britain  and  the  United  States.  It  is,  therefore, 
expected  that  she  will  follow  the  principles  of  the  Open 
Door  and  maintain  the  equal  opportunity  of  trade  and 
the  integrity  of  China.  In  agreement  with  this  belief, 
Andre  Tardieu  wrote:20 

"M.  Clemenceau  contemplated  that  France  would  de- 
vote her  general  activity  to  three  essential  objects; 
Firstly,  the-  maintenance  of  her  regained  security;  Sec- 
ondly, the  renewal  of  her  economic  strength;  Lastly,  the 
organization  of  peace  according  to  these  principle 

national      liberty.   .   .   .   These     three     objects     could     be 

achieved  by  one  means  only:  the  maintenance  of  those 

alliances   and    friendly    relations    which   enabled    France 


118    POLICIES  OF  GREAT   POWERS  IX  CHINA 

to  win  the  war.  .  .  .  Hence,  his  policy  of  defensive 
agreements  with  Great  Britain  and  the  United  States; 
Hence  also  the  action  and  prolonged  assistance  to  those 
young  nations  that  owed  their  origin  or  extension  to 
the  victory— Bohemia,  Poland,  Jugo-Slavia,  Roumania, 
and  Greece. 

In  spite  of  conflicting  opinions,  we  can,  however,  make 
certain  conclusions  regarding  the  future  of  the  French 
policy  in  China.  Under  the  present  conditions  of  close 
cooperation  between  Great  Britain  and  France  as  allies, 
and  the  United  States  as  their  associate  in  the  World 
War,  we  may  conclude  that  France  would  more  likely 
rate  with  Great  Britain  and  the  United  States  and 
maintain  the  Open  Door  policy.  Her  unqualified  par- 
ticipation in  the  New  International  Banking  Consortium 
evidenced  that  she  meant  to  side  with  Great  Britain  and 
the  United  States  in  upholding  the  policy  of  the  Open 
Door  and  international  cooperation.  If,  however,  the 
New  Consortium  should  fail,  resulting  in  the  break- 
down of  the  policy  of  international  cooperation  and  the 
resumption  of  the  old  international  struggle  for  conces- 
sions, and  especially  if  Japan  should  assume  the  leader- 
ship  in  the  affairs  of  China  and  champion  the  sphere 
polity,  it  is  then  safe  to  say  that  France  would  likewise 
abandon  the  ( )pen  Door  policy  and  adopt  the  policy  of 
exploitation  and  aggression. 

The  future  policy  of  France  in  China  depends,  there- 
fore, upon  whether  the  United  States  or  Japan  should 
assume  the  leadership  in  the  Chinese  affairs.  If  it 
should  he  the  United  States,  then  she  would  follow  the 
leadership    of    America    and    uphold    the    policy    of    the 

Open  Door  and  international  cooperation.     If  it  should 

be  Japan,  she  would  then  fall  hack  on  the  policy  of  the 
dosed  Door  and  exploitation.  It  is  expected,  however, 
that  the  New  Consortium  will  succeed,  and  the  United 
thereby  maintain  her  leadership  and  that  France 
will  then  cooperate  with  her  and  Great   Britain. 


THE  POLICY  OF  FRANCE  IN  CHINA      119 


NOTES  TO  CHAPTER  VI 

1.  Documents  Diplomatiques,  Affairs  Du  Tonkin,  1874/82,  p.  1 

et  secl- 

2.  State  Papers,  Vol.  65,  1874,  Traite  de  Paix  et  d  Alliance 
Entre  la  France  et  1'Annam,  Signe  a  Saigan,  le  15  Mars,  1874, 
pp.  375-381. 

3.  State  Papers,  Vol.  75,  1884.  pp.  100-103. 

4.  Hertslet,  Vol.  1,  No.  52,  pp.  321-323. 

5.  Hertslet,  No.  53,  pp.  323-327. 

6.  Vide  supra,  Chapter  on  the  International  Struggle  for  Con- 
cessions. 

7.  Hertslet,  No.  54,  pp.  327-328. 

8.  Hertslet,  No.  55,  pp.  329-331. 

9.  MacMurray,  1897/2.  March  15.  1897. 

10.  MacMurray,  1898/6,  April  16,  1898. 

11.  MacMurray,  1895/5. 

12.  Sir  E.   Monson  to   Lord   Salisbury,   Aug.  31,   1900,  China, 
!.  1901,  in  128. 

13.  U.  S.  For.  Rel..  1902,  p.  931,  Memorandum  handed  to  the 
Secretary  of  State,  March  19,  1902. 

14.  MacMurray,  1907/7. 

15.  U.  S.  For.  Pel..  1910,  Ambassador  Bacon  to  the  Sec.  of 
State,  Feb.  4,  1910. 

16.  A.  Gerard,  Ma   Mission  En  Chine,  pp.  xxiii-xxiv. 

17.  M.  C.  Shu,  Railway  Problems  in  China,  p.  76  et  seq. 

18.  Ibid.,  p.  82  et  seq. 

19.  MacMurray,  1913/8. 

20.  MacMurray,  P'14/2. 

21.  MacMurray,  1905/11. 

22.  MacMurray,  1913/12. 

23.  Memorandum  of  term-,  of  agreement  come  to  at  a  meeting 
at  the  Banque  dc  l'lndo-Chine,  Pari-.,  on  the  23rd  day  of  May, 
1910,  U.  S.  For.  Rel..  pp.  280-281;  MacMurray,  I'M  1/5. 

24.  Millard's   Review,  Sept.  4.   1920,  p.  4. 

25.  Millard's  Review,  Supplement,  July  17.  1920,  p.  1". 

26.  \idf  Tardieu,  French  Policy  after  War,  article  published 
in  World's  Work,  Jan.,  1921,  p.  242  el  seq. 


VII 
THE  POLICY  OF  GERMANY  IN  CHINA 

In  the  decade  lying  between  1895  and  1905  the  policy 
of  Germany  in  China  was  rather  indefinite  and  unde- 
cided. It  inclined  probably,  more  or  less,  toward  the 
example  of  Russia.  After  the  Russo-Japanese  War 
(1904-1905),  however,  her  policy  changed  and  she  be- 
came a  devoted  adherent  of  the  doctrine  of  the  Open 
Door. 

In  the  first  years  (1895-1905)  of  her  participation  in 
the  affairs  of  the  Far  East,  she  was  quite  uncommited 
as  to  the  fate  of  China.  Whether  that  country  was  to 
be  partitioned,  or  demarcated  into  spheres  of  influence, 
or  remain  intact  under  the  shelter  of  the  Open  Door, 
seemed  not  to  matter  to  her,  provided  she  be  a  party 
to  whatever  benefits  accrued  therefrom.  She  would  not 
object  to  a  partition  which  would  give  her  a  new  colonial 
possession.  Nor  would  she  object  to  the  establishment 
of  a  sphere  of  influence,  which  would  yield  an  outlet 
for  her  capital  and  commerce.  Nor,  again,  would  she 
be  unwilling  to  welcome  a  strong  and  stable  China, 
which  would  be  a  counterpoise  to  her  own  rivals — Great 
Britain,  Japan,  France  and  Russia.  Whatever  the  fate 
of  China,  the  thing  she  cared  for  most  was  thai  she 
should  not  lose  out  in  any  game  that  was  being  played. 
Prince  Von  Biilow,  the  then  Chancellor  of  Germany, 
said  in  the  Reichstag  on  April  27,  1898 : * 

"We  should  certainly  not  take  the  initiative  in  a  par- 
tition of  China.  All  that  we  did  was  to  see  in  good  time 
that,  whatever  happened,  we  should  not  draw  a  blank. 
The  moment  when  the  train  starts  does  not  always  de- 

120 


THE  POLICY  OF  GERMANY  IN  CHINA    121 

pend  on  the  will  of  the  passenger.  It  is  his  business  to 
see  that  he  does  not  miss  the  train.  The  devil  take  the 
hindmost." 

The  first  event  that  brought  her  influence  to  the  Far 
East,  as  we  have  seen,  was  the  tripartite  intervention 
for  the  retrocession  of  Liaotung  in  1895.  Her  joining 
in  the  intervention  was  largely  dictated  by  the  policy  of 
encouraging  Russian  expansion  in  the  Far  East,  so  that 
she  could  avoid  a  conflict  with  Russia  in  Europe.  To 
this  effect  Prince  Von  Biilow  wrote  in  his  "Imperial 
Germany" : 2 

"Towards  the  end  of  the  eighties  Prince  Bismarck 
once  said  to  me.  with  reference  to  Russia  and  Asia: 
'In  Russia  there  is  a  very  serious  amount  of  unrest  and 
agitation  which  may  easily  result  in  an  explosion.  It 
would  be  best  for  the  peace  of  the  world  if  the  explo- 
sion took  place  in  Asia  and  not  in  Europe.  We  must 
be  careful  not  to  stand  just  in  the  way,  otherwise  we 
may  have  to  bear  the  brunt  of  it.'  If  we  had  allowed 
ourselves  to  be  thrust  forward  against  Russia  before  the 
Russo-Japanese  War,  we  should  have  had  to  bear  the 
brunt."' 

Quite  in  line  with  the  opinion  of  Bismarck,  Germany 
did  not  stand  in  the  way  of  Russian  expansion  in  North 
China,  but  on  the  contrary,  gave  her  passive  encourage- 
ment thereto. 

Following  the  tripartite  intervention,  Germany  made 
a  second  move  and  that  was  the  capture  of  Kiaochow. 
She  had  long  desired  to  obtain  the  possession  of  that 
port,  and  in  November,  IS' '7,  when,  in  a  general  attack 
by  the  robbers  on  the  village,  two  German  priests  were 
killed  iii  Kiaochwang,  Shantung,  "in  circumstances  be- 
yond the  control'  of  the  local  authorities,"  -he 
the  pretext  and  occupied  Kiaochow.     As  a  consequence, 


122    POLICIES  OF  GREAT  POWERS  IN  CHINA 

by  the  convention  of  March  6,  1898/  she  obtained  the 
lease  of  Kiaochow  for  ninety-nine  years  (Section  I, 
Art.  2).  Besides,  she  made  Shantung  an  exclusive 
sphere  of  influence  by  acquiring  the  right  of  first  option 
in  any  undertaking,  in  which  foreign  assistance  is 
needed  : 

"If  within  the  province  of  Shantung  any  matters  are 
undertaken  for  which  foreign  assistance,  whether  in  per- 
sonnel, or  in  capital,  or  in  material,  is  invited,  China 
agrees  that  the  German  merchants  concerned  shall  first 
be  asked  whether  they  wish  to  undertake  the  works  and 
provide  the  materials.  In  case  the  German  merchants 
do  not  wish  to  undertake  the  said  works  and  provide 
the  materials,  then  as  a  matter  of  fairness  China  will 
be  free  to  make  such  other  arrangements  as  suits  her 
convenience."      (Section  3.) 

Germany,  on  the  other  hand,  engaged  "at  no  time  to 
sublet  the  territory  leased  from  China  to  another  power" 
(Section  I,  Art.  5). 

The  signilicance  of  the  lease  convention  needs  to  be 
emphasized.    Said  von  Bulow:8 

"...  In  any  case.  I  say.  we  have  secured  in  Kiao- 
chow a  strategical'  and  political  position  which  assures 
us  a  decisive  influence  on  the  future  of  the  Far  East. 
From  this  strong  position  we  can  look  with  complacency 
on  the  development  of  affairs.  We  have  such  a  large 
sphere  of  action  and  such  important  tasks  before  us  that 
we  have  no  occasion  to  grudge  other  nations  the  conces- 
sions made  them.  German  diplomacy  will  pursue  its 
path  in  the  East  as  everywhere  else — calmly,  tirmly  and 
tullv.  We  will  never  play  the  part  of  mischief 
maker,  nor  will  we  play  that  of  Cinderella." 

Thus,  in  the  occupation  of  Kiaochow.  its  strategic 
location  was  fully  realized.  It  is,  and  undoubtedly  will 
continue   to   be,   the  leading   commercial   port  of    North 


THE  POLICY  OF  GERMANY  IN  CHINA     123 

China.  Tientsin,  its  rival,  is  closed  in  winter  by  ice; 
Kiaochow  is  open  throughout  the  year.  When  the  rail- 
ways connect  the  Tientsin-Pukow  line  with  the  Peking- 
Hankow  line,  that  is.  by  the  Tsinan-Shunteh  railway, 
and  when  the  Lung-llai  railway  is  completed,  running 
through  the  Yellow  River  Basin  connecting  with  Kiao- 
chow by  the  Kaomi-Hsuchow  line,  Kiaochow  will  be- 
come the  outlet  of  the  trade  of  North  China  and  the 
Yellow  River  Basin,  just  as  Shanghai  is  the  outlet  of 
the  trade  of  the  Yangtze  Valley.  The  trade  of.  North 
China,  which  goes  now  through  the  Peking-Hankow  rail- 
way to  Peking  and  thence  to  Tientsin  for  export  will  in 
time  be  all  diverted  to  Kiaochow.  Von  Biilow  therefore 
said :  "We  have  secured  in  Kiaochow  a  stragetical  and 
political  position  which  assures  us  a  decisive  influence 
on  the  future  of  the  Far  East." 

The  German  occupation  of  Kiaochow  was  also  sig- 
nificant, not  only  from  the  point  of  view  of  its  strategic 
location,  but  also  from  that  of  European  politics  and 
the  German  policy  of  Weltpolitik.  The  capture  of 
Kiaochow  was  the  first  practical  step  of  the  German 
policy  of  Weltpolitik  and  the  German  expansion.  It 
also  dated  the  beginning  of  the  German  naval  expan- 
sion, resulting  in  a  deadly  rivalry  with  Great  Britain. 
To  this  effect  Prince  von  Biilow  said  : ,; 


"About  the  time  when  we  began  to  build  our  fleet, 
(our  landing  in  Kiaochow  took  place  in  the  autumn  of 
1897,  when  I  first  held  office  as  Secretary  of  State  for 
foreign  affairs.  'It  is  from  the  year  of  Kiaochow  that 
the  growth  of  the  formidable  German  navy  dates,'  wrote 
the  Times  in  the  course  of  the  present  war;  this  paper 
has  from  the  first  followed  the  development  01  our 
sea  power  with  eyes  sharpened  by  envy.  Ii  was  quite 
true  that  the  fact  thai  we  established  ourselves  on  the 
coast   of   China   was   directly   and   indirectly   conn 

with  our  naval  program,  and   was  uur  fust  practical  step 
along  the  path  of   world  politics.     A   few   weeks  after 


124    POLICIES  OF  GREAT  POWERS  IN  CHINA 

(his)  we  concluded  the  Shantung  treaty  with  China, 
which  was  one  of  the  most  significant  actions  in  mod- 
ern German  history  and  which  secured  for  us  a  'place 
in  the  Sun'  in  the  Far  Bast,  on  the  shores  of  the  Pacific 
Ocean   which  have  great  future  before  them." 


Soon  after  the  seizure  of  Kiaochow  came  the  Boxer 
Uprising  of  1900.  Taking  advantage  of  the  oppor- 
tunity, Germany  decided  to  play  the  leading  role  in  the 
international  expedition  to  China  and  thus  to  enhance 
her  prestige  before  the  eyes  of  the  Powers.  She,  there- 
fore, despatched  the  largest  number  of  troops  (amount- 
ing to  17,000)  under  the  command  of  Count  Von  Wal- 
dersee  whose  military  prestige  far  surpassed  those  of 
the  military  commanders  of  the  other  Powers.  Although 
arriving  too  late  for  the  relief  of  the  Legations,  he  was 
recognized  by  the  commanders  of  all  Powers,  except 
the  United  States,  as  Commander-in-Chief  of  the  Allied 
forces  in  China. 

Further,  the  Kaiser  used  this  opportunity  to  wreak 
vengeance.  Pie  instructed  his  soldiers  to  give  no  quar- 
ter and  to  so  terrorize  the  Chinese  that  they  would  not 
dare  to  look  into  the  face  of  a  German  soldier  again. 
In  obedience  to  instructions,  the  German  military  car- 
ried out  a  policy  of  depredation  and  annihilation  in 
Paotingfu  and  other  places  of  North  China  far  beyond 
what  was  necessary.  Similiarly,  during  the  negotiation 
for  settlement,  the  German  representative  proved  to  be 
the  most  uncompromising  and  relentless,  demanding 
enormous  indemnities  and  insisting  on  the  death  penalty 
for  the  principal   culprits. 

In  face  of  such  a  revengeful  and  terrorizing  attitude 
on  the  part  of  Germany,  one  could  scarcely  believe  the 
news  when  it  was  reported  that  on  October  16,  1900,8 
Germany  had  entered  into  an  agreement  with  Great 
Britain  affirming  the  Open  Door  (Art.  1),  and  pledging 
to  uphold   the  territorial   integrity  of   China    (Art.   2), 


THE  POLICY  OF  GERMANY  IN  CHINA    125 

and,  in  case  of  any  Power  making  aggressions  against 
China,  to  come  to  an  understanding  to  protect  their  in- 
terests (Art.  3).  One  naturally  asked:  "What  does  this 
mean?  Is  Germany  sincere?"  and  the  answer  must  be 
in  the  negative.  In  his  famous  speech  made  in  the 
Reichstag,  March  15,  1901,  von  Biilow  said  in  sub- 
stance : 

"The  Anglo-German  agreement  has  no  reference  to 
Manchuria  (Hear,  hear  and  sensations)  ...  I  can 
now  add  that  during  the  negotiations  which  led  to  the 
conclusion  of  this  agreement,  we  left  no  room  for  any 
doubt  that  we  did  not  take  it  as  applying  to  Manchuria, 
as  regards  the  future  of  Manchuria.  Really,  Gentle- 
men. I  can  imagine  nothing  which  we  regard  with  more 
indifference  (Hear,  hear  on  the  right).9 

Again,  to  the  same  effect,  Secretary  John  Hay  testi- 
fied : 10A 

"My  heart  is  heavy  about  John  Bull.  Do  you  twig 
his  attitude  to  Germany?  When  the  Anglo-German 
pact  came  out  I  took  a  day  or  two  to  find  out  what  it 
meant.  I  soon  learned  from  Berlin  that  it  meant  a  hor- 
rible practical  joke  on  England.  From  London,  I  found 
out  what  I  had  suspected,  but  what  it  astounded  me 
after  all  to  be  assured  of — that  they  did  not  know! 
When  Japan  joined  in  the  pact,  I  asked  them  why. 
They  said,  we  don't  know.  Only  if  there  is  any  fun 
going  on,  we  want  to  be  in!  Cassini  was  furious — 
which  may  be  because  he  has  not  been  let  into  the 
joke!" 

Later,  it  was  discovered  that  Germany  entered  the 
pact,  not  to  uphold  the  Open  Door  doctrine  and  the  in- 
tegrity of  China,  but  rather  to  deprive  Great  Britain 
of  the  exclusive  rights  in  the  Yangtze.108  As  a  condi- 
tion for  the  evacuation  of  Shanghai,  Germany  specially 
insisted  on  the  Open  Door  in  the  Yangtze,  while  reserv- 


126    POLICIES  OF  GREAT  POWERS  IX  CHINA 

ing,  on  the  other  hand.  Shantung  as  her  own  exclusive 
preserve :  u 

"The  Peking  Government  and  the   Yangtze  viceroys 
shall  engage  not  to  grant  to  any    Power  special   advan- 
a  political,  military,  maritime  or  economic  na- 
ture  nor   to   allow   the   occupation   of   any   other   points 
commanding  the  river  either  below  or  above  Shanghai." 

ainst  this,  Japan  and  Great  Britain  protested; 
[uence,  no  s  greement   relating  thereto  was 

d,  but  a  general  declaration  was  professed  to  have 
ived  by  the  German  Government  that  the  (  >pcn 
Door  would  he  maintained  in  the  Yangtze  Valley.18 

So  far,  the  policy  of  (  lermany  in  China  was  more  like 
the   Russian  policy   than   that   of   the  Open   Door.     She 
maintained    her    railway    guards    along    the    Tsingtau- 
Tsinan  Railway  much  the  same  as  Russia  in  Manchuria. 
In  1900  the  Kaiser  made  a  speech  to  the  Russian  Gov- 
ernment that  his  policy  in  China  was  just  like  the  Rus- 
sian policy.18     In  the  ca      of  the  Russian  agression  in 
Manchuria,  while  Great   Britain,  Japan  and  the  United 
entered   vigorous   protests,14   Germany   remained 
ominously  silent.     As  France  was  not  expected  to  pro- 
being  the  ally  of  Russia,  Germany's  failure  to  pro- 
tituted  a  lonely  exception,  clearly  betraying  her 
intention   and   policy   of    silently    countenancing   Russian 
expansion   in    Pastern   Asia.18 

When  the  Russo- Japanese  War  came,  however,  the 
policy  of  Germany  in  China  underwent  a  radical  change. 
Isolated  during  the  war  and  con  fronted  by  two  hostile 
coalitions  (the  Dual  Alliance  of  Prance  and  Russia  and 
the  Anglo-Japanese  Alliance)  she  realized  that,  if  in 
of   the   war,   there   should   he  any   spoliation 

of  China,  she  could  obtain  only   Shantung;  while  the 

;    whom   were  her  enemies,   would 

gain  the  rest  of  China.     This,  obviously,  was  detrimental 

to  her  interests.     In  anticipation,  therefore,  she  proposed 


THE  POLICY  OF  GERMANY  IN  CHINA    127 

to  the  United  States  Government  to  make  a  declaration 
for  the  maintenance  of  the  integrity  of  China,  and  to 
counsel  the  Powers  to  retrain  from  any  act  of  spoliation 
at  the  close  of  the  war.  With  this  proposal  the  United 
States  agreed. 

Dating  from  this  proposal  to  the  United  States,  Ger- 
many committed  herself  thenceforth  to  the  Open  Door 
Doctrine.  Instead  of  keeping  aloof,  she  joined  the  Pow- 
ers in  the  Hukuang  loan,17  the  currency  reform  and  in- 
dustrial development  loan,1"  and  the  reorganization 
l'oan.loA  Instead  of  aggression,  she  showed  due  respect 
for  Chinese  sovereignty.  By  the  end  of  1905,  she 
handed  her  postal  service  to  the  Chinese.1913  By  the  Con- 
vention of  November  28,  1905,-°  she  withdrew  her 
troops  from  Kiaochow  and  Kaomi.  By  the  amendment 
of  December  1,  1905. -1  to  the  agreement  of  April  17, 
1899,  concerning  the  maritime  customs  office  at  Tsingtau, 
she  abandoned  her  restrictions  on  the  Chinese  customs 
derogatory  to  Chinese  sovereignty  and  restored  the 
service  almost  to  the  same  status  as  elsewhere  except 
requiring  twenty  percent  of  the  proceeds  as  contribu- 
tion to  the  government  of  Tsingtau. 

Further,  instead  of  domination  and  exploitation,  she 
manifested  remarkable  self-restraint.  By  the  agreement 
of  July  24,  1911,--  with  the  exception  of  "the  Fangtze 
and  Tzechwan  mining  areas  and  the  mining  district  from 
Chinlingchen  along  the  Kiaochow-Chinan  Railway  in  a 
northerly  direction  for  a  distance  of  thirty  li  to  Chang- 
tien"  and  some  other  areas,  "all  mining  rights  hitherto 
granted  by  China  to  the  company  within  thirty  li  (15 
kilometers)  on  both  sides  of  the  Kiaochow-Chinan  Kail- 
road  now  in  operation,  the  Tientsin-Pukow  Railroad 
now  under  construction  and  the  Kiaochow-I-Chow  Rail- 
road recently  surveyed  are  hereby  canceled"  (Art.  3), 
stipulating,  however,  thai  in  case  foreign  assistance, 
either  in  capital   or  enj  or   material,   should   be 

needed  in  the  development  of  the  relinquished  distri< 


128    POLICIES  OF  GREAT  POWERS  IN  CHINA 

first  option  should  be  given  to  the  Germans.  Likewise, 
by  the  agreement  oi  December  31,  1913,23  relating  to  the 
extension  of  the  Tsingtau-Tsinan  Railway,  while  she 
procured  the  two  concessions,  one  from  Kaonii  to 
Hsuchowfu  and  the  other  from  Tsinan  to  Shunteh,  she 
surrendered  the  railway  concessions,  acquired  under  the 
Convention  of  March  6,  1898,  for  the  lease  of  Kiao- 
chow.-' 

What  is  more,  instead  of  being  uncompromising  and 
revengeful  and  relentless,  as  shown  during  the  Boxer 
Uprising,  she  manifested  an  attitude  of  friendliness  and 
helpfulness,  with  a  view  to  winning  the  friendship  and 
goodwill  of  the  Chinese  and  to  extending  German  com- 
merce and  kullur  in  China.  By  the  Tientsin-Pukow 
Railway  loan  of  January  13,  1908,-5A  she  gave  the  best 
terms  for  railway  construction,  which  have  since  served 
as  the  model  for  other  railway  construction  contracts. 
She  inaugurated  the  project  of  systematic  forestation, 
extending  even  into  the  hinterland  of  Kiaochow.-50  She 
established  high  schools  and  professional  schools  for 
the  spread  of  German  kullur,  to  which  Chinese  students 
flocked  from  all  parts  of  the  country.  As  a  result  of 
this  systematic  and  deliberate  cultivation  of  Chinese 
friendship,  her  trade  prospered  by  leaps  and  bounds,  as 
evidenced  by  the  following  figures,-"  which  show  that 
from  1902  to  1911  the  imports  increased  tenfold,  and 
the  exports  about  twenty. 

Imports  1902 1 1,078,000  marks 

1911   114,938,000       " 

Exports  1902 4,865.880      " 

1911     80,295,000      " 

This  policy  of  the  Open  Door  and  friendliness, 
however,  was  interrupted  by  the  Great  War.  As  is 
well  known,  Germany  at  the  beginning  of  the  war 
was   supplanted   in   the   East   by  Japan,   who   occupied 


THE  POLICY  OF  GERMANY  IN  CHINA    129 

the  entire  length  of  the  Tsingtau-Tsinan  line  on  Oc- 
tober 6,  1914,  and  captured  Tsingtau  on  November  7. 
On  August  14,  1917,  China  declared  war  on  Germany, 
terminating  all  treaty  relations.-7  By  the  Treaty  of 
Peace  signed  at  Versailles,  June  28,  1919  (Arts.  156, 
157,  158),  Germany  was  to  renounce  in  favor  of  Japan 
all  her  rights  in  Shantung,  including  the  lease  of  Kiao- 
chow,  the  Tsingtau-Tsinan  Railway  with  the  adjoining 
mines,  and  the  submarine  cables,  thus  losing  her  sphere 
of  influence  in  China.  She  was  further  directed  to  re- 
turn to  China  the  astronomical  instruments  which  she 
had  taken  during  the  Boxer  Uprising  (Art.  131),  the 
concessions  at  Tientsin  and  Hankow  (Art.  132),  to  re- 
nounce the  balance  of  the  Boxer  indemnity  (Art.  128), 
and  to  withdraw  from  the  protocol  of  September  7, 
1901,  the  tariff  arrangement  of  August  29,  1902,  and  the 
arrangements  of  1905  and  1912  regarding  Whampoo. 

After  Germany's  passage  through  the  ordeal  of  war 
and  the  humiliation  of  peace,  it  is  interesting  to  conjec- 
ture what  will  be  her  future  policy  with  regard  to  China. 
Shorn  of  all  rights,  she  returns  to  China  without  a  sphere 
of  influence,  without  a  base  of  action,  without  a  settle- 
ment, and  without  the  protection  of  extraterritorial 
jurisdiction.  On  the  other  hand,  she  has  to  enter  into 
the  spheres  of  influence  of  other  Powers,  and  compete 
there  for  her  commerce  and  interests.  Under  such  cir- 
cumstances, she  cannot  favor  the  policy  of  the  Closed 
Door,  not  to  say  that  of  partition  or  control ;  rather,  she 
will  favor  the  Open  Door  policy.  She  will  desire  the 
maintenance  of  the  equal  opportunity  of  trade  and  the 
preservation  of  China's  integrity,  so  that  her  commerce 
may  yet  compete  with  the  other  Powers  now  holding 
spheres  of  influence.  We  may.  therefore,  venture  the 
conclusion  that  Germany's  attitude  towards  China  will 
be  the  same  policy  of  the  Open  hour  and  friend! 
she  SO  splendidly  adhered  to  in  the  years  immediately 
before  the  outbreak  of  the  Great   \Ya: 


130    POLICIES  OF  GREAT  POWERS  IN  CHINA 


NOTES  TO  CHAPTER  VII 

I.  I '.it  rick  Gallagher,  America's  Aims  and  Asia's  Aspirations, 
]).  143 ;  Overlackj  Foreign  Financial  Control  in  China,  pp.  139- 
141;  von  I'.ulow's  statement  in  the  Reichstag,  April  27,  1898, 
reported  in  the  enclosure  of  the  letter  from  Sir.  !■'.  Lascelles  to 
the  Marquess  of  Salisbury— China,  No.  1  (1899),  Affairs  of 
China. 

_'.    Vim  Bulow,  Imperial  Germany,  Translation,  1916,  pp.  49-50. 

3.  The  Shantung  Question,  published  by  the  Chinese  National 
Welfare  Society  in  America,  March  1,  1920,  p.  37. 

4.  MacMurrav,  Treaties  and  Agreements  with  and  Concerning 
China,  Eiertslefs  China  Treaties,  Vol.  I,  No.  59,  p.  350 
et  seq. :  The  Shantung  Question,  op.  cit,  App.  No.  1  to  Vol.  2, 
pp.  47-50. 

5.  Overlack,  op.  cit.,  pp.  139-140,  von  Billow's  statement  in 
the  Reichstag,  April  27,  1898,  reported  in  the  enclosure  of  the 
letter  from  Sir  F.  Lascelles  to  the  Marquess  of  Salisbury — China, 
No.  1  (1899).  Affairs  of  China. 

Von  Biilow's  Imperial  Germany.  Trans.,  1916,  p.  117. 

7.  Morse,  The  International  Relations  of  the  Chinese  Empire, 
Vol.  3,  p.  309. 

8.  MacMurray,  1900/5;  Asakawa,  The  Russo-Japanese  Con- 
flict, pp.  160-161. 

9.  London  Times,  March  16,  1901,  quoted  in  S.  Tomimas,  The 
Open   Door  Policy  and  the  Territorial   Integrity  of  China,  p.  80 

■i.;  Asakawa,  op.  cit.,  p.  103. 
10A.    \V.   R.  Thayer.   Life  of  John  Hay,  Vol.  2,  p.  248,  letter 
to  Henry  Adams,  Nov.  21,  1900;  Morse,  op.  cit.,  Vol.  3,  p.  328. 
10B.    Asakawa,  op.  cit..  pp.   160-161. 

II.  Morse,  op.  cit.,  Vol.  3,  p.  366;  China,  No.  3  (1902),  No. 
22,  Baron  Eckardstein  to  the  Marquess  of  Lansdowne,  pp.  6-7. 

12.  Ibid..  Vol.  3.  p.  366;  July  30-Nov.  16.  1902,  China,  No.  3, 
1902,  also  No.  26,  No.  31,  No.  41. 

13.  Mud.,  VoL  3,  p.  266. 

14.  Vide  supra,  Chapter  on  the  International  Struggle  for  Con- 

15.  MacMurray,  1916/2.  MacMurray,  1898/3.  The  coopera- 
tion of  her  financial  agents  with  those  of  Great  Britain  in  the 
Anglo-German   loans   of    March  23,    1896,  and   of    March   1,    1898, 

due  more  to  the  exclusion  of  German  interests  from  the 
Russo-Chinese  Bank  than  to  any  free  and  voluntary  desire  for 
cooperation  growing  oul  of  similarity  of  policy. 

16.  U.  S.  For.  ReL,  1905,  p.  1. 

17.  MacMurray,  l('ll/5. 
1  MacMurrav,  1911/2. 
19A.     MacMurray,   1913/5. 

I'M:.    Hornbeck,  Contemporary  Politics  in  the  Far  East,  p.  297. 
The  Shantung  Question,  op.  cit.,  pp.  54-56. 


THE  POLICY  OF  GERMANY  IN  CHINA    131 

21.    MacMurray,  1899/2. 

11.    MacMurrav,   1900/4;   The   Shantung  Question,  op.  at.,  pp. 
56-57. 

23.  MacMurrav,  1913/16. 

24.  MacMurrav,  1898/4. 
25A.    MacMurray,  1908/1. 
25B.    Hornbeck,  op.  cit.,  p.  297. 

26.  Gallagher,  op.  cit.,  p.  144. 

27.  The  Shantung  Question,  op.  cit.,  pp.  64-65. 

28.  Dr.  O.   Frank,   Deutschland   mul   China  vor,   in  und  nach 
dem  Kriege,  1915,  p.  17. 


VIII 
THE  POLICY  OF  GREAT  BRITAIN  IN  CHINA 

The  policy  of  Great  Britain  in  China  is  mainly  com- 
mercial. It  aims  primarily  at  trade  predominance.  Dur- 
ing the  first  period  of  the  diplomatic  history  of  China, 
she  directed  her  policy  toward  the  opening  of  China  and 
the  settlement  of  satisfactory  diplomatic  intercourse  at 
Peking.  During  the  second  period  when  the  other  Powers 
were  snatching  one  dependency  after  another  from  China, 
although  she  seized  Burma  and  Sikkin  as  a  counter-move 
to  French  acquisition  in  Burma  and  Tonkin,  she  pursued 
more  or  less  a  policy  of  laissez  faire,  giving  the  fullest 
measure  of  liberty  to  private  initiative  and  refraining 
herself  as  far  as  possible  from  political  or  territorial  en- 
croachment, thus  cultivating  the  good  will  of  the  Chinese 
and  winning  trade  predominance.  When  during  the  third 
period  the  international  struggle  for  concessions  came  on 
— a  struggle  resulting  in  the  establishment  of  spheres  of 
influence — Britain,  unable  to  check  the  general  move- 
ment for  the  spoliation  of  China,  was  compelled  to  join 
in  the  scramble  for  concessions  and  in  the  demarcation 
of  as  large  a  sphere  of  influence  as  possible  for  herself. 
This  she  did  by  exacting  from  China  the  Declaration 
of  Non-Alienation  respecting  the  Yangtze  Valley  and 
by  entering  into  agreements  with  other  Powers,  pledging 
herself  to  recognize  their  respective  spheres  of  influence, 
— with  France  in  1896,1  with  Germany  in  1898,2  with 
Russia  in  1899 3  and  1907,4  and  with  Japan  in  1902,6 
1905,°  and  191 1.7 

Asa  commercial  power,  she  naturally  favors  the  Open 
Door  doctrine  in  China.  It  is  to  her  advantage  that  China 
shall  remain  as  wide  open  as  possible  for  the  trade  of 

132 


POLICY  OF  GREAT  BRIT  ATX  IN  CHINA     133 

the  world  ;  on  the  other  hand,  it  is  to  her  disadvantage 
to  have  China  cut  up  into  closed  spheres  of  influence  or 
partitioned.  For  while  she  is  not  anxious  to  take  on  any 
more  territorial  responsibilities,  she  does  desire  to  see 
her  trade  spread  and  predominate  in  the  markets  of 
China. 

When  the  battle  of  concessions  commenced  toward  the 
close  of  the  last  century,  threatening  the  very  integrity 
of  China,  she  was  therefore  most  anxious  to  proclaim  a 
doctrine  like  the  Open  Door,  guaranteeing  the  equal  op- 
portunity of  trade  and  upholding  the  integrity  of  China. 
The  debates  in  the  House  of  Commons  at  that  period 
were  filled  with  utterances  for  the  Open  Door.  Lord 
Charles  Beresford,  returning  from  China  to  Great  Britain 
by  way  of  the  United  States,  preached  enthusiastically 
the  maintenance  of  the  Open  Door  in  China. 

The  policy  of  Great  Britain  was  at  that  time  set  forth 
by  Sir  W.  V.  Harcourt  in  his  speech  in  Parliament  on 
April  29,  1898 : 8 

"...  I  think  I  should  be  accurately  stating  the  princi- 
ples of  policy  at  which  the  Government  aimed  under  the 
following  heads :  they  were  stated  by  several  ministers 
of  authority,  and  notably  by  the  Right  Honorable  Gentle- 
man, the  Leader  of  the  House,  in  the  early  part  of  the 
year.  I  shall  say  that  these  principles  were  to  oppose, 
for  ourselves  and  for  others,  territorial  occupation,  which 
would  necessarily  lead  to  the  dismemberment  of  the 
Chinese  Empire;  and,  secondly,  that  there  was  to  be  the 
principle  of  the  Open  Door,  by  which  freedom  of  access 
for  the  commerce  of  Great  Britain,  under  the  Treaty  of 
Tientsin,  and  other  nations,  should  be  maintained  and 
preserved  in  China.  Thirdly,  there  was  to  be  no  acknowl- 
edgement of  claims  to  special  spheres  of  influence  for 
particular  governments  and  states,  but  equal  rights 
should  be  claimed  and  exercised  everywhere  ..." 

Anxious  as  she  ntight  be  to  sponsor  the  Open  Door 
doctrine,  she  found  that  she  herself  was  Stained  with  the 


134    POLICIES  OF  GREAT  POWERS  IN  CHINA 

spoliation  of  China  and  the  establishment  of  the  sphere 
of  influence  in  the  Yangtze,  and  could  not  consistently 

preach  a  doctrine  which  she  herself  had  not  been  able 
emplify.  She  was  therefore  compelled,  though  re- 
luctantly, to  let  the  United  States  take  the  honor  as  well 
as  the  responsibility  of  sponsoring  and  championing  the 
doctrine  in  the  Far  Bast. 

Although  disqualified  to  be  the  sponsor  of  the  doctrine, 
she  was,  however,  most  anxious  to  be  a  sincere  and  earn- 
est upholder  and  supporter  of  it.  Long  before  the  an- 
nouncement of  the  Open  Door  doctrine,  she  had  prac- 
ticed it.  As  soon  as  she  had  established  herself  in  Hong 
Kong,  she  opened  that  island  as  a  free  port  to  the  trade 
of  the  world.  In  1845,  when  she  had  secured  the  British 
settlement  in  Shanghai,  she  made  it  an  international  set- 
tlement/' When  John  Hay  sent  his  circular  note  of 
September  6,  1899,  proclaiming  the  Open  Door  policy  in 
China,  Great  Britain  was  the  first  to  reply  in  favor.10  On 
October  16,  1900,  she  entered  the  Anglo-German  agree- 
ment with  Germany  affirming  the  Open  Door  and  up- 
holding the  integrity  of  China,  which  was  sent  to  the 
several  powers.  Later,  against  the  Manchurian  Conven- 
tion of  1900-1902  and  the  Seven  Articles  of  Russia  in 
1903,  in  conjunction  with  Japan  and  the  United  States, 
she  entered  vigorous  protests.  Failing  in  diplomatic 
representations,  she  entered  into  an  alliance  with  Japan 
in  1902,  upholding  the  Open  Door  and  the  integrity  of 
China,  and  directed  primarily  at  the  Russian  advance  in 
North  China.  I  lor  subsequent  renewal  of  the  alliance  in 
1905  and  1911  all  reaffirmed  the  principles  of  the  Open 
Door  doctrine.1-  I  ler  recent  wholehearted  support  of  the 
New  International  Hanking  Consortium,  and  especially 
her   rejection   of   Japan's    reservation    regarding   South 

Manchuria  and  Eastern  Inner  Mongolia,  again  evidenced 
her  true  desire  and  intention  to  follow  the  (  )pen  Door 
doc  triii' 

I  ler  adherence  to  the  Open  Door  doctrine  was,  how- 


POLICY  OF  GREAT  BRITAIN  IN  CHINA    135 

ever,  seriously  handicapped,  and  in  some  instances,  even 
compromised  by  her  alliance  with  Japan  in  1905  and 
1911.  In  exchange  for  the  Japanese  protection  of  her 
interests  in  China  and  India,  she  was  constrained  to  give 
to  Japan  the  recognition  of  paramountcy  over  Korea, 
leading  to  the  annexation  of  that  unhappy  land  in  1910, 
and  a  free  hand  and  special  interests  in  South  Manchuria, 
resulting  in  the  closing,  partial  at  hast,  if  not  complete, 
of  South  Manchuria  to  the  trade  of  other  nations,  and 
paving  the  way  for  the  territorial  expansion  of  Japan  in 
that  region.  In  the  Shantung  question,  while  sympathy 
might  he  given  for  the  hard  circumstances  under  which 
the  secret  pledge  was  wrested  from  (heat  Britain  during 
the  critical  days  of  her  life  and  death  struggle  in  Europe, 
she  was  compelled  to  support  Japan,  though  much 
against  her  will,  and  in  apparent  contravention  of  the 
Open  Door  doctrine,  and  in  violation  of  her  own  sense 
of  justice  and  right.  Mention  must,  however,  be  made 
that  not  to  an  unappreciable  measure  has  the  alliance 
exercised  a  restraining  influence  on  Japan,  as  evidenced 
by  the  Nanking  incident  when,  on  account  of  the  killing 
of  some  Japanese,  Japan  proposed  to  make  war  on  China, 
thus  taking  advantage  of  the  revolution  to  strangle  the 
republic  in  the  cradle.  This  was,  however,  nipped  at 
the  hud  by  the  British  counsel  of  moderation.11 

Though  compromising  at  times  and  yet  still  upholding 
the  Open  Door  doctrine  as  Ear  as  possible,  the  financial 
activity  of  Greal  Britain  in  China  became  more  and  more 
litan  and  international.  Having  learned  the  les- 
sons of  ruin  petition,  she  was  almost  always  in 
favor  of  eliminating  competition  by  international  coopera- 
tion, thus  incidentally  asserting  the  principle  of  equal  op- 
portunity. She  cooperated  with  Germany  in  the  Tientsin- 
Pukow  Railway,  with  French  interests  in  the  Pukow- 
Sinyang  Railway,  and  with  Germany,  France  and  the 
United  States  in  the  Hukuang  Railway,  thus  admitting 


136    POLICES  OF  GREAT  POWERS  IX  CHINA 

foreign  interests  into  the  Yangtze  Valley,  which  was  re- 
garded  as  her  exclusive  sphere  of  influence.  With  re- 
spect to  administrative  loans,  remembering  the  tragic  ex- 
perience she  had  in  Egypt  resulting  in  final  bankruptcy 
and  foreign  control,  she  was  determined  not  to  favor  any 
single  nation's  financing  China  for  administrative  re- 
organization, hut  was  strongly  in  favor  of  having  the  ad- 
ministrative loans  shared  by  the  powers,  on  the  basis  of 
equality,  if  possible,  and  financed  by  the  hanking  institu- 
tions supported  by  the  governments  interested.  In  other 
words,  she  favored  the  policy  of  the  internationalization 
of  loans,  as  evidenced  by  the  following  Utter  of  the  For- 
eign Office  to  Lord  Balfour  of  Burleigh:18 

"In  regard  to  the  first  point  raised  in  that  letter,  namely, 
the  question  of  the  advisability  of  internationalizing 
loans  in  China,  I  am  to  inform  your  Lordship  that  Sir 
E.  Grey  is  unable  to  concur  in  the  statement  that  it  is 
not  in  the  interests  of  Great  Britain  to  agree  to  such  an 
arrangement.  On  the  contrary.  His  Majesty's  Govern- 
ment and  the  other  governments  concerned  have,  from 
the  experience  of  pasl  years,  come  to  the  unanimous  con- 
clusion  that,  both  in  the  interests  of  their  own  financiers 
and  investing  public,  and  also  a>  a  safeguard  of  China's 
credit,  it  is  incumbent  on  them  n>  prevent,  as  far  as  lies 
in  their  power,  all  possibility  of  a  return  to  the  former 
dangerous  policy  of  unprofitable  international  competi- 
tion in  China  which  only  enabled  the  Chinese  Government 
to  obtain  money  without  adequate  guarantee  and  rendered 
it  impossible  for  the  governments  interested  to  exei 
the  necessary  control  over  the  terms  of  any  loans.  There 
can  be  no  doubt  that  the  internationalization  of  future 
loans  would  go  far  to  secure  this  desirable  end." 

Further,  for  fear  of  extravagance  and  corruption  on 

liic  part   of   the  Chinese  officials,   she  was  quite   insistent 

on  the  necessary  supervision  over  the  proper  expenditure 
of  the  proceeds  of  the  loans,  as  evidenced  by  the  follow- 
ing extracts : 


POLICY  OF  GREAT  BRITAIN  IN  CHINA     137 

"I  am  to  add  that,  as  a  matter  of  principle.  His  Maj- 
esty's Government  would  not  feel  justified  in  ordinary 
circumstances  in  giving  their  support  to  any  loans  which 
did  not,  in  their  opinion  and  in  the  opinion  of  the  other 
governments  concerned,  offer  adequate  guarantees  for 
the  proper  and  useful  expenditure  of  the  proceeds,  and 
the  satis  factor)'  security  for  the  payment  of  principal  and 
interest."  M 

"...  It  was  also  explained  to  Mr.  Crisp  that  as  a 
matter  of  general  principle,  His  Majesty's  Government 
would  never  support  a  loan  concluded  without  adequate 
guarantees  for  the  control  of  the  expenditure  of  the 
proceeds  and  without  proper  security  .  .  .  "  17 

Thus  far  we  have  seen  that  the  policy  of  Great  Britain 
is  mainly  commercial  and  financial.  Let  us  now  turn 
and  examine  the  political  side  of  her  policy.  Burdened 
with  the  crushing  weight  of  colonial  responsibilities  ex- 
tending throughout  the  world,  she  is  no  longer  anxious 
for  territorial  gains.  This  principle  is  convincingly  set 
forth  in  the  following  statement  of  Bonar  Law  made  in 
the  House  of  Commons  on  November  27,  1911  :liA 

"He  (the  Rt.  Hon.  Gentleman)  pointed  out  quite  truly 
that  we  do  not  desire  to  extend  our  Empire  further.  .  .  . 
I  say  without  any  hesitation  that  we  do  not  desire  acces- 
sions of  territory,  and  in  saying  that  1  am  not  speaking 
for  one  small  section  of  the  house.      I  believe  that   1   am 

speaking  for  the  nation  at  large.  We  do  no!  <1<  sire  acces- 
sions of  territory.  Our  responsibilities  are  great  enough 
already.  .  .  .  Our  one  desire,  our  one  ambition,  is  not 
to  enlarge,  but  to  build  up  our  Empire." 

"The  only  limitation  of  this  principle  is  an  obvious  one. 
There  are  certain  places  lying  next  to  British  possessions 
or  perhaps   strategically  commanding  important    British 

route-."  which  Great  Britain  cannot  see  pass  into  other 
bands. '•''■ 


138    POLICIES  OF  GREAT  POWERS  IN  CHINA 

In  spite  of  her  disinterestedness,  however,  when  the 
international  struggle  fur  concessions  commenced,  she 
was  confronted  with  the  problem  of  either  abstaining 
from  the  general  scramble,  or  of  joining  the  Powers. 
She  could  not,  and  probably  would  not,  abstain  from  the 
genera]  scramble,  for  that  would  give  advantage  to  her 
rivals,  thus  upsetting  the  balance  of  power.  She  was, 
therefore,  compelled  to  resort  to  the  policy  of  participa- 
tion. But  even  in  joining  the  scramble,  she  seldom  took 
the  initiative,  but  she  always  acted,  as  a  defensive  meas- 
ure, to  compensate  her  own  loss  or  to  restore  the  over- 
turned balance  of  power.  It  is  regrettable  to  mention 
that,  by  thus  participating  in  the  scramble,  the  leading 
commercial  power  in  the  Far  East,  as  she  is,  disqualified 
her. elf  from  being  the  sponsor  of  the  Open  Door  doc- 
trine and  the  moral  leader  among  the  powers  in  China. 

In  this  contest  for  concessions  she  directed  her  policy 
mainly  against  Russia  and  France  from  1895  to  1904. 
Rivaling  the  Franco-Russian  loan  of  400,000,000  francs 
in  1S(>5,  in  partnership  with  the  German  interests,  she 
advanced  the  loans  for  the  rest  of  the  installments  for 
the  indemnity  to  Japan.1'-'  Competing  with  the  French 
gain  in  territory  en  the  Tonkin  frontier  and  the  rail- 
way extension  into  Yunnan,  she  secured  territorial 
advantages  on  the  Burmese  frontier,  and  the  exten- 
sion of  the  Indo-Burmese  line  to  the  head  of  the 
navigable  waters  of  the  Yangtze. -,,A  Suspicious  of  the 
ulterior  intention  of  the  French  fleet  hovering  near 
the  mouth  of  the  Yangtze  River,808  and  fearing,  in 
the  words  of  Sir  Claude  M.  MacDonald,  British  Min- 
ister  in  Peking  at  that  time,  "to  find  one  morning  that 
I.;,  reason  of  the  murder  of  a  foreign  subject  or  the  re- 
fusal of  some  demand  by  a  foreign  power,  some  place  on 
the  Yangtze  has  been  seized  and  was  to  be  retained  in  a 
99  year's  lease/'81  she  quietly  obtained  from  China,  as 
a  guarantee  of  her  own  sphere  of  influence,  the  declara- 
tion  of    non-alienation   of   the   Yangtze   Valley.88      As   a 


POLICY  OF  GREAT  BRITAIN  IN  CHINA    139 

protection  against  the  French  occupation  and  fortifica- 
tion of  Kwangchow-wan,  she  obtained  the  extension  of 
the  Hong  Kong  territory.  As  a  check  against  the  Rus- 
sian occupation  of  Port  Arthur  which  she  resented  most 
vehemently,  she  obtained  the  lease  of  Weihaiwei,  "for  so 
long  a  period  as  Port  Arthur  shall  remain  in  the  occupa- 
tion of  Russia,"  -'  thus  evidently  showing  the  intention 
of  the  lease.-"1  Forestalling  the  Russian  design  as  to  the 
office  of  the  Inspector-General  of  the  Chinese  Maritime 
Customs,  she  procured  the  declaration  from  the  Chinese 
Government  that  a  Britisher  should  be  appointed,  while 
British  trade  predominated.-"  Likewise,  in  the  contest 
for  railway  concessions,  to  hold  the  Russian  advance  at 
arm's  length  from  Peking,  she  interposed  her  own  in- 
fluence by  the  construction  of  the  Peking-Newchuang 
line.  To  counterbalance  the  Belgian  concession  for  the 
Peking-Hankow  Railway,  hacked  by  Russia  and  Krance, 
and  to  penalize  China  for  breach  of  faith  in  admitting  the 
participation  of  the  Russo-Chinese  Bank  in  the  Peking- 
Hankow  deal,  by  diplomatic  pressure  and  the  display  of 
naval  power,  she  obtained  the  concessions  for  the  Tient- 
sin-Chinkiang,  the  Pukow-Sinyang,  the  Soochow*-Hang- 
chow-Ningpo,  the  Shanghai-Nanking,  the  Canton-Kow- 
loon  and  Peking-Newchuang  Railways,  totaling  2,800 
miles.-7  Finally,  directed  primarily  against  the  Russian 
advance  in  Manchuria,  she  concluded  the  alliance  with 
Japan  in  1902,  thus  making  it  possible  for  Japan  to  fight 
Russia  iii  L904-5  without  the  participation  of  France. 
With  respect  to  Tibet,  the  British  policy  as  related  to 

Russia    wa-    further    illustrated.      As    in    1'M.H)    the    Dalai 
Lama  sent  a  mission  to  the  (  Var  and  later  despatched  a 

second  mission  under  the  headship  of  a  Russian,  Great 

Britain  was  aroused  to  the  menace  of    Russia's  tivacht  r- 
ous  advance  on    India,      tin-  jewel  of   the   British   p 
BionS.      For  breach   of   treaty   obligations  as  stipulated    in 

the  trade  regulations  of  L893,  the  expedition  of  Colonel 
YounghusLand  to  'I  ibet  was  sent  in  1903,  and  on  Septem- 


140    POLICIES  OF  GREAT  POWERS  EN  CHINA 

ber  7,  1904,  the  treaty  with  Tibet  was  signed.  !  British 
consent  was  to  be  obtained  before  making  territorial  con- 
cessions to  other  foreign  |  Art.  9  a).  No  other 
foreign  power  should  intervene  in  Tibetan  affairs  (Art. 
9-b),  or  send  representatives  or  agents  into  Tibet  (Art. 
9-c).  Xo  commercial  concessions  should  be  granted  with- 
out similar  and  equivalent  concessions  being  given  to  the 
British  (Art.  9-d).  No  Tibetan  revenues  should  be 
pledged  to  any  foreign  power  (Art.  ()-e).  On  April  27, 
1906,  by  the  Convention  with  china.-'-'  she  promised  not 
to  annex  Tibetan  territory  nor  interfere  with  the  adminis- 
tration of  the  country  (Art.  2).  while  making  China 
pledge  that  she  would  not  permit  intervention  in  Tibet  by 
any  other  power  (Art.  2).  From  \{)\2  to  1915,  however, 
when  the  British  saw  that,  by  the  various  conventions, 
Russia  had  established  her  joint  suzerainty  over  outer 
Mongolia,  she  was  thereby  impelled  to  follow  suit  and 
demanded  similar  privileges  regarding  Tibet.  On  July 
3,  1914,"°  a  tripartite  agreement  was  reached  between 
China,  Tibet  and  India.  Tibet  was  divided  into  Inner 
and  Outer  Tibet.  It  was  to  form  a  part  of  Chinese  terri- 
tory and  to  be  under  Chinese  suzerainty,  but  the  autonomy 
of  Outer  Tibet  was  to  be  recognized.  China  and  Great 
Britain  were  to  abstain  from  interference  in  internal  ad- 
ministration. China  pledged  not  to  convert  Tibet  into 
a  province  nor  will  <  hiter  Tibet  he  represented  in  the 
Chinese  Parliament.  China  was  to  send  no  troops,  no 
civil  officers,  nor  colonizers  to  Outer  Tibet.  All  these  pro- 
visions tend  to  indicate  that  Great  Britain  would  advance 
there  in  exactly  the  same  way  that  Russia  Wjould  in 
Mongolia.  This  convention,  however,  was  not  ratified 
by  the  Chinese  Government,  which  would  not  admit 
Chinghai  or  Kokonor,  south  of  the  Altun-tag  Mountains, 
or  north  of  the  Tangla  Range  as  part  of  (  hiter  Tibet, 
Batang  and  Litang  in  Szechuan  as  part  of  Inner  Tibet, 
and  a  small  part  of  Sinkiang  beyond  Kuenlung  Moun- 
tains as  part  of  Outer  Mongolia.  ; 


POLICY  OF  GREAT  BRITAIN"  IN  CHINA    141 

After  the  Russo-Japanese  War,  however,  when  Russia 
had  been  checked,  Great  Britain  changed  the  objective 
of  her  policy.  A  new  menace  had  arisen  against  her,  and 
that  was  the  rising  power  of  Germany.  Formerly  in  the 
contest  against  Russia  only  her  interests  in  the  Far  East 
were  threatened,  but  now  her  very  existence  was  menaced. 
The  rapid  naval  construction  and  the  weltpolitik  of  the 
Kaiser  challenged  her  naval  supremacy,  the  preservation 
of  which  was  the  cardinal  principle  of  the  British  policy. 

To  face  this  growing  menace,  she  had  not  only  to  ex- 
pand her  navy  as  far  as  her  resources  would  allow  her, 
but  also  to  come  to  an  amicable  understanding  with  her 
old  friends,  and  become  reconciled  with  some  of  her  old 
enemies.  She  therefore  entered  into  the  Hay-Paunce- 
fote  Treaty  with  the  United  States  in  1901,  nullifying 
the  Clayton-Bulwer  Treaty  of  1850,  removing  the  source 
of  friction  with  the  United  States  by  an  amicable  settle- 
ment of  the  Panama  Canal  question,  much  to  the  satis- 
faction of  the  United  State.-,  at  the  same  time  withdraw- 
ing her  fleet  from  the  West  Indies  for  concentration  in 
the  North  Sea,  thus  leaving  the  United  States  supreme 
in  the  West  Indies/-  In  1904  she  entered  into  an  entente 
with  France,  formerly  her  rival,  admitting  French  in- 
terests into  the  Yangtze  Valley  and  withdrawing  her  fleet 
from  the  .Mediterranean  to  the  North  Sea,  leaving  the 
British  interests  there  to  the  protection  of  France.  In 
1905  she  renewed  the  alliance  with  Japan,  this  time  pledg- 
ing to  help  in  war  whenever  either  party  should  he  in- 
voked,  and   at   the   same   time    withdrawing   her    Pacific 

fleet  from  the  Pacific  and  Indian  ( >ceans  for  concentration 
in  the  North  Sea,  and  leaving  British  interests  in  china 
and  India  to  the  protection  of  Japan.  In  L907  she  con- 
cluded an  aj  reement  with  her  once  bitteresl  enemy,  Rus- 
sia." Besides  a  division  of  sphere  of  influence  in  P 
and  an  understanding  relating  to  Afghanistan,  she  a 
with  Russia  on  the  question  of  Thibet  thai  they  would 
mutually  respect  the  integrity  of  the  same  (Art.  1 ),  ab- 


142     POLICIES  OF  GREAT  POWERS  IN  CHINA 

stain  from  all  interference  in  internal  administration 
(Art  2),  seek  no  economic  concessions  <  Art.  4),  -end  no 
representatives  to  Llassa  (Art.  .V),  deal  with  the  state 
exclusively  through  the  ( government  of  China,  its  suzerain 
(Art.  2),  and  "agree  that  no  part  of  the  revenues  of 
Thibet,  whether  in  kind  or  in  cash,  shall  he  pledged  or 
assigned  to  Great  Britain  or  Russia  or  to  any  of  their 
subjects"   i  An.  5).: '■' 

Comment  must  be  made,  in  passing,  that  the  policy  of 
Great  Britain  in  China  was  characterized  in  a  marked 
degree  by  justice  and  fair  play.  A  British  subject  occu- 
pies the  office  of  Inspector-General  of  the  Chinese  mari- 
time customs  only  while  her  track-  predominates.35  This, 
of  course,  means  that,  to  continue  to  hold  the  position,  she 
must  enter  into  commercial  competition  and  win  pre- 
dominance. In  other  words,  she  holds  the  office,  as  long 
as  she  remains  the  champion  in  the  field  of  China's  for- 
eign trade ;  conversely,  the  moment  she  loses  the  cham- 
pionship, she  loses  therewith  the  post  of  Inspector-Gen- 
eral. In  fact,  it  was  specifically  agreed  that  "if  at  some 
future  time  the  trade  of  some  other  country  at  the  various 
Chinese  ports  should  become  greater  than  that  of  Great 
Britain,  China  will  then,  of  course,  not  be  bound  to  neces- 
sarily employ  an  Englishman  as  Inspector-General." M 
As  a  corollary  of  this  sportsman-like  arrangement  it  is 
thought  by  some  powers  that  under  the  most  favored  na- 
tion treatment,  when  Great  Britain  loses  her  trade  pre- 
dominance, whatever  power  gains  the  commercial  ascend- 
ency can  likewise  claim  the  post  of  Inspector-General. 
Again,  in  the  Maekav  Treaty  of  1902,  though  the  honor 
must  also  be  equitably  shared  with  the  United  State-  and 
Japan  which  entered  into  similar  treaties  in  1903,  she 
was  the  first  power  to  concede  the  surrender  of  the  extra- 
territorial jurisdiction  upon  satisfactory  judicial  reform 
on  the  part  of  China,  and  also  the  increase  of  the  import 
tariff  to  not  more  than  12  1-2  per  cent  and  the  export 


POLICY  OF  GREAT  BRITAIN  IN  CHINA    143 

tariff  to  not  more  than  7  1-2  per  cent  in  return  for  the 
abolition  of  likin,  upon  the  unanimous  consent  of  all  the 
powers  enjoying,  and  that  may  enjoy,  the  most  favored 
nation  treatment,  and  upon  the  obtainment  of  the  said 
consent  without  the  grant  of  any  political  concession  or 
exclusive  commercial  privileges. 

Further,  in  the  agreement  of  January.  1908,37  Great 
Britain  pledged  to  reduce  the  importation  of  opium  by 
one-tenth  every  year  for  a  period  of  ten  years,  beginning 
with  1908,  provided  the  Chinese  Government  would  re- 
duce the  production  and  consumption  of  native  opium  in 
China  in  the  meantime  in  the  same  ratio,  and  also  agreed 
that  this  ten-year  agreement  was  to  last  for  three  years, 
at  the  end  of  which  time,  if  the  Chinese  Government 
should  have  faithfully  executed  its  obligations,  the  agree- 
ment would  be  extended  until  the  completion  of  the  whole 
period  of  ten  years,  in  1917.  Accordingly,  at  the  end  of 
the  three  years,  when  the  Chinese  Government  was  found 
to  have  faithfully  done  its  part  of  the  obligation,  on 
May  8,  191 1,38  she  entered  into  a  further  agreement 
ing  to  continue  the  previous  convention  of  January, 
1908,  and  to  agree 

"that  the  export  of  opium  from  India  to  China  shall 
cease  in  less  than  seven  years  if  clear  proof  is  given  of 
the  complete  absence  of  production  of  native  opium  in 
China"  (Art.  2),  and  "that  Indian  opium  shall  nol  be 
conveyed  into  any  province  in  China  which  can  establish 
by  clear  evidence  that  it  has  effectively  suppressed  the 
cultivation  and  the  import  of  native  opium"  (Art. 

Subsequently,  when  the  Chinese   Revolution  and  the 

civil  war  had  caused  either  the  relaxtion  of  the  efforts  in 
Suppression  Or  the  revival  of  the  cultivation  of  native' 
opium,  she  generously  overlooked  the  fault  and  faith- 
fully adhered  to  her  previous  agreements.  Thus,  by  a 
repentance  of  heart  and  earnest  cooperation  in  the  sup- 
pression of  the  opium  evil,  she  obliterated  the  one  damag- 


144    POLICIES  OF  GREAT  POWERS  IN  CHINA 

ing  blot  on  her  fair  name  and  removed  the  great  cause 
of  grudge  cherished  by  the  Chinese  ever  since  the  Opium 
War  of  1840-42. 

There  were,  however,  instances  when  her  sense  of  jus- 
tice and  fair  play  was  carried  to  excess,  resulting  in  a 
disregard  of  the  popular  sentiment  of  the  Chinese,  and 
the  unwise  assertion  of  the  superiority  of  a  ruling  race. 
In  the  case  of  the  Shanghai-Hangchow-Ningpo  Railway, 
for  instance,  the  people  of  the  region  traversed  by  the 
line  had  already  collected  the  funds  and  brought  the  line 
almost  to  completion,  when  the  British  insisted  on  their 
rights  based  on  the  grant  of  1898,  and  forced  a  loan  on 
the  Chinese  Government  in  1908. 30 


Such  being  her  policy,  let  us  now  speculate  as  to  her 
probable  future  course  in  China.  Her  traditional  adher- 
ence to  the  Open  Door  doctrine  and  her  present  participa- 
tion in  the  New  International  Banking  Consortium  indi- 
cate that  she  will  return  to  China  with  a  new  zeal  and 
determination  to  uphold  the  principles  of  the  equal  op- 
portunity of  trade  and  the  integrity  of  China.  Her  pur- 
suance of  this  policy  will,  however,  depend  upon  two 
contingencies.  The  first  depends  upon  whether  the  New 
Consortium  will  succeed  or  not.  If  it  succeeds,  it  means 
the  assurance  of  American  leadership  in  the  affairs  of 
China,  and  consequently  the  maintenance  of  the  Open 
Door  doctrine,  in  which  case  she  will  be  able  to  uphuld 
it,  and  also  incidentally  continue  her  old  policy  of  the 
internationalization  of  loans  and  the  proper  supervision 
of  the  expenditure  of  the  proceeds  of  the  loans.  But 
if  the  New  Consortum  should  fail,  it  would  mean  the 
loss  of  American  leadership  in  the  Orient,  and  conse- 
quently the  breakdown  of  the  Open  Door,  in  which  case 
she  would  not  be  able  to  check  the  general  struggle  for 
concessions  in  China,  but  would  be  compelled  to  join 
in  the  scramble  as  she  did  in  1898,  1908  and  1913-14.40 


POLICY  OF  GREAT  BRITAIN  IN  CHINA    145 

The  other  contingency  is  the  Anglo-Japanese  Alliance 
now  waiting  for  renewal.  Should  she  renew  the  alliance 
in  its  old  form,  which  is  not  expected,  she  would  have  to 
overlook  Japan's  attack  on  her  interests  in  the  Yangtze 
Valley  in  1915,  as  evidenced  by  the  Twenty-one  Demands, 
and  Japan's  unfaithfulness  during  the  war  as  evidenced 
by  the  press  attack  after  the  failure  to  impose  Group  V 
on  China,  and  also  the  secret  alliance  with  Russia  of 
191 6.41  She  would  also  have  to  compromise  her  Open 
Door  principles,  in  exchange  for  the  Japanese  protection 
of  British  interests  in  China  and  India,  by  giving  Japan 
a  free  hand  in  South  Manchuria  and  Eastern  Inner  Mon- 
golia, if  not  in  the  whole  of  Manchuria  and  Mongolia  in 
view  of  the  temporary  ebb  of  Russian  influence  in  these 
regions,  and  also  probably  in  the  whole  of  North  China 
because  of  Japan's  succession  to  the  former  German 
rights  in  Shantung.  She  would  further  be  obligated,  un- 
less otherwise  provided,  to  support  Japan,  as  against 
China  in  the  League  in  the  Shantung  question  and  the 
abrogation  of  the  Treaties  of  May  25,  1915,  which  obli- 
gation would  seriously  disable  her  from  a  frank  and  im- 
partial judgment,  when  China,  as  is  expected,  might  bring 
up  these  questions  for  reconsideration.  Further,  she 
would  have  to  suffer  loss  in  the  favor  of  the  nations  with 
which  Japan  had  causes  of  friction,  such  as  the  United 
States,  China,  Siberia  and  Australia,  unless  she  could 
obtain  immunity  from  such  a  liability  and  reserv< 
own  freed. in  of  action  by  an  exemption  from  the  obliga- 
tion to  assisl  Japan,  either  in  war  or  in  diplomacy,  or  in 
both,  in  case  of  a  conflict  of  Japan  with  either  of  these 
powers.  On  the  cither  hand,  should  she  discontinue  the 
alliance  in  toto,  she  would  be  confronted  with  Japanese 
resentment.  This  would  be  almost  inevitable,  in  view  of 
Japan's  anxiety  to  save  herself  from  diplomatic  isolation 
and  to  forestall  the  eventuality  of  the  reconsideration  of 
the  Shantung  question  and  the  cancellation  of  the  1915 
treaties.      This    would    surely    manifest    itself    in    hostile 


146     POLICIES  OF  GREAT  POWERS  IN  CHINA 

fomentation  of  rebellions  in  India  and  Egypt  and  other 
territories,  if  not  in  entering  into  alliance  with  the  enemies 
of  Great  Britain. 

Thus  Great  Britain  is  confronted  with  a  most  delicate 
and  serious  diplomatic  problem,  upon  the  decision  of 
which  hangs  the  future  of  her  policy  in  China.  It  is, 
however,  expected  that  she  will  find  a  way  out,  by  which, 
on  the  one  hand  she  can  restrain  Japan  from  any  tendency 
to  create  opposition  or  to  foment  rebellions,  and  yet, 
on  the  other  hand,  she  can  uphold  the  Open  Door  doctrine 
in  China  and  avoid  conflict,  because  of  Japan,  with  the 
powers  bordering  on  the  Pacific*" 


NOTES  TO  CHAPTER  VIII 

I.  MacMurrav,  Treaties  and  Agreements   with  and  Concern- 
ing China,  1896/1. 

MacMurray,  1000/5. 

3.  MacMnrra'v,  1899/3. 

4.  MacMurrav,  1907/16. 

5.  MacMurrav,  1902/2. 

6.  MacMurray,  1905/6. 

7.  MacMurra'y,  1911/7. 

8.  The  rarliamentarv  I  Abates,  Vol.  56,  Apr.  4,  1898  to  Apr.  29. 
1898,  p.  1559  et  seq. 

9.  Morse,  The  international  Relations  of  the  Chinese  Empire, 
I.  p.  348. 

10.  U.    S.   For.    Rel.,    1899,    Lord    Salisbury   to    Mr.   Choate, 

same,  Nov.  30,  1899,  pp.  135-136. 

II.  State  Papers,  Vol.  94,  p.  1227,  The  Marquis  of  Salisbury 
to  Sir  C.  Scott.     .        2      1902. 

M    MacMurray,  1905/6,  and  1911/7. 

13.  Vide   infra,   chapters   on   the    New    International    Banking 
Consortium. 

14.  R.   R.  Gibson,   Forces    Mining  and   Undermining  China,   p. 
279. 

15.  State  Papers.  Vol.  106,  pp.  328-330,  Mar.  4,  1912,  Bigned  by 
\Y.  Langley. 

16.  Vol.  106,  p.  330.  For.  Off.  to  Lord  Balfour 
of  Burleigh,  Mar.  4,  1912,  signed  by  W.  Langley. 

17.  Stat.  Sir  Edward  Gre)  to  Sir  J.  Jordan, 
p.  432.  Aug.  23,  1912 

Parliamentary  Debates,  5th  Sen.-..  Nov. -Dec.,  1911,  Vol. 
32,  pp.  73-74. 

Murray,  The  Foreign  Policy  of  Sir  Edward  Grey, 
1906-1915,  p.  48. 


POLICY  OF  GREAT  BRITAIN  IN  CHINA    147 

19.    F.  It.  Huang,  Public  Debts  in  China,  p.  21  et  seq. 

20A.  Vide  supra,  Chapter  on  the  International  Struggle  for 
Com 

Hishida,  the  International  Position  of  Japan  as  a  Great 
Power,  p.  207;  China,  No.  1,  1899,  pp.  344-347;  M.  C.  Hsu, 
Railway  Problems  in  China,  p.  43. 

21.  China,  No.  1,  1899,  No.  20,  p.  15. 

22.  Hishida,  op.  cit.,  p.  200;  Parliamentary  Papers,  China,  No. 
2,  1898. 

23.  Hertslet's  China  Treaties,  Vol.  1,  No.  24,  pp.  120-122; 
State  Papers,  Vol.  90,  pp.  17-18. 

24.  Hen  25,  p.  122;  State  Papers,  Vol.  90,  p.  16. 

25.  Balfour's  instruction  to  Sir  F.  Lascelles,  British  Am- 
bassador at  Berlin,  April  2,  1898:  "You  should  inform  the 
German  Government,  pointing  out  to  them  that  the  action  of 
Russia  forces  this  step  on  us.  Its  sole  object  is  to  maintain  the 
balance  of  power  in  the  Gulf  of  Pechili,  which  was  menaced  by 
Russia's  occupation  of  Port  Arthur.  We  do  not  anticipate  this 
policy  will  give  any  umbrage  to  German  interests  in  Shantung, 
since  it  is  not  possible  to  make  Weihaiwei  a  commercial  port,  and 
it  would  never  be  worth  while  to  connect  it  with  the  peninsula 
by  railway."— China,  No.  1,  1899,  No.  2,  p.  2. 

26.  MacMurray,  1898/2. 

27.  M.  C.  Hsu,  Railway  Problems  in  China,  pp.  39-43;  British 
Blue  Book,  Affairs  of  China,  No.  1,  1899,  pp.  344-347,  Sir  Mac- 
Donald  to  Lord  Charles  Beresford. 

28.  MacMurrav,  1906/2. 

29.  MacMurrav.  1906/2. 

30.  MacMurray,  1906/2. 

31.  H.  K.  Tong,  British  and  Chinese  Government  Again  Con- 
ring  Tibetan   Question,   Article  in   Millard's   Review,  June  7, 

32.  I.  II.  l.atane,  From  Isolation  to  Leadership,  pp.  120-121. 
.U.    MacMurrav,  1907/16. 

34.  Millard,  (jur  Eastern  Question,  App.  X,  pp.  459-463; 
Hertslet,  Vol.  1,  No.  121,  pp.  620-622. 

35.  MacMurray,   1898/2,  Feb.  13,  KS98. 
3d.    MacMurrav,  1898/2. 

.U.    MacMurrav,   1911/4;   L\  S.  For.  Rel.,  1908.  i 
38.    MacMurray,  1911/4. 

.MacMurray,  1908/3,   Mar.  <<.   1908. 
4d.    In   fact,  it  has  I   en   reported  that   she  entered  into  the 
•  incut  with   France  and  Japan  at  the  Pari 
irving  China  into  three  greal  spheres  of  influence, 
givii  mi  Siberia,  t"  beyond  Lake  Baikal)  all 

China  except  the  n  d  for  France  am!  Great  Britain; 

t..  France,  Yunnan,  Kwangsi  and  Kweichou  and  Western  Kwan- 
tuna  (Indu-Chiua  and  Tonkin,  Eastern  Siarn  ami  certain  rights 
in  Syria),  and  reserving  t<>  hersel  British  sphere  •  (India, 

i.  Burma,  Palestine,   \  tia  Minoi  an  1  the  ( auca 
Western  Siam,  the  Federated  Malay  States),  Tibet,  Szechuan, 


148    POLICIES  OF  GREAT  POWERS  IN  CHINA 

Kuantung.  forming  the  littoral  of  Hong  Kong,  and  equal  com- 
mercial nghts  in  the  Yangtze  Valley.  (T.  !•'.  Millard,  China's 
I  the  Peace  Conference,  Millard's  Review,  Supp.,  July  17, 
1920,  p.  18).  Should  this  report  be  true,  then  Bhe  would  be 
prepared  to  adopt  the  sphere  policy,  if  the  -New  Consortium 
.should  fail,  as  she  had  done  in  1913  and  1914  after  the  with- 
drawal of  the   United   Slates   from  the   Sextuple  Consortium. 

41.  Mac  Murrav,   1916/9. 

42.  Millard's  Review,  May  29,  1920,  pp.  629-634.  "In  1920  the 
world  seems  to  he  called  upon  to  choose  between  a  liberal  policy 
in  the  bar  East  and  a  Japanese  policy.  Again  it  is  England  that 
must  make  the  choice.  She  will  do  so  when  she  signifies  or 
fails  to  signify  Iter  intention  to  abrogate  or  to  modify  the  Treaty 
of  Alliance  with  Japan.  The  United  States  has  confidence  that 
England  will  make  the  right  choice  today  as  she  did  in  1902." — 
Prof.  C.  E.  Kemer. 


IX 

THE  POLICY  OF  THE  UNITED  STATES 
IN  CHINA 

The  policy  of  the  United  States  in  China  is  character- 
ized by  unselfishness  and  friendliness.  Quite  in  vivid 
contrast  with  the  other  grasping  powers  who  pounced 
upon  China  in  the  general  scramble  for  leases  in  1898, 
she  kept  her  hands  off  and  was  able  to  withstand  the 
temptation.  On  the  contrary,  she  sought  to  uphold 
China's  integrity  and  sovereignty  and  save  her  from  par- 
tition. Throughout  the  negotiation  for  the  settlement 
of  the  Boxer  trouble,  she  opposed  any  proposal  that 
would  threaten  to  partition  China  and  burden  her  with 
a  load  of  indemnity  that  would  make  her  the  economic 
vassal  of  the  Powers  for  years.1  To  this  effect  Li  Hung- 
chang,  who  conducted  the  negotiation  on  behalf  of  the 
Chinese  Government,  testified:2  "I  tremble  to  think  of 
what  might  have  been  China's  fate  but  for  the  stand 
taken  by  the  American  Government."  Subsequently,  she 
returned  part  of  the  Boxer  indemnity  for  the  education 
of  the  young  Chinese  in  America.''  Again,  in  the  Cur- 
rency and  Industrial  Development  Loan,4  she  undertook 
the  contract  upon  the  request  of  the  ( Chinese  ( rovernment, 
and  to  secure  international  cooperation  and  harmony,  she 
shared    it    with    the    other    powers    and    surrendered    her 

right  to  an  advisership  in  favor  of  the  appointment  of  a 
neutral  nationality.  Finally,  during  the  Great  War,  upon 
hearing  civil  dissension  as  caused  by  the  controversy 
over  entrance  into  the  war  on  the  allied  side,  President 

Wilson  sent  a  friendly  note,  on  June  5,   1''17,    counseling 

the  Chinese  t<»  compose  their  factional  disputes  and  to 
establish  a  united,  central  and  responsible  government. 

14LJ 


150    POLICIES  OF  GREAT  POWERS  IN  CHINA 

Thus  briefly  characterized,  the  policy  of  the  United 
States  in  China  is  the  Open  Door  Doctrine.  When  the 
international  struggle  for  leases  and  concessions  com- 
menced in  L897-9,  carving  China  into  exclusive  spheres 
of  influence  and  thus  threatening  to  close  the  various 
ros  to  the  trade  of  the  United  States.  John  1  lay, 
then  Secretary  of  State,  was  confronted  with  a  most 
complicated  problem.  He  could  not  join  in  the  gen- 
eral scramble,  for  that  would  be  contrary  to  public 
opinion  and  to  the  traditional  policy  of  non-intervention. 
Nor  could  he  remain  inactive  and  permit  the  doors  of 
China  to  be  closed,  for,  China  being  such  a  potentially 
wealthy  nation,  the  United  States  could  not  afford  to 
lose  her  share  of  commerce.  His  difficult  problem  and 
his  attitude  thereto  were  clearly  shown  in  a  contempo- 
rary letter:  ° 

".  .  .  We  are,  of  course,  opposed  to  the  dismember- 
ment of  that  empire,  and  we  do  not  think  that  the  public 
opinion  of  the  United  States  woud  justify  this  Govern- 
ment in  taking  part  in  the  great  game  of  spoliation  now 
going  on.  At  the  same  time  we  are  keenly  alive  to  the 
importance  of  safeguarding  our  great  commercial  inter- 
ests in  that  empire  and  our  representatives  there  have 
orders  to  watch  closely  everything  that  may  seem  cal- 
culated to  injure  us.  and  prevent  it  by  energetic  and 
timely   representations." 

Thus  compelled  to  act  so  that  the  doors  of  China  might 
remain   Open    for   the   trade   of    American    merchants,   he 

sent  his  first  circular  note,  on  September  6,  1899,  to 
Condon,  Berlin  and  St.  Petersburg,  and  on  Novemb 
to  Tokio.  on  November  17,  to  Rome,  and  on  November 
21,  to  Paris.'  Though  wording  his  notes  with  some  dif- 
ferences to  suit  the  various  chancellories,  he  set  forth 
in  essence  the  following  proposal:8 

"This  Government  is  animated  by  a  sincere  desire  that 
the    interests   of    our   citizens    might   not   be   prejudiced 


POLICY  OF  UNITED  STATES  IN  CHINA    151 

through  exclusive  treatment  by  any  of  the  controlling 
powers  within  their  so-called  'spheres  of  interest'  in 
China,  and  hopes  also  to  retain  there  an  open  market 
for  the  commerce  of  the  world,  remove  dangerous  sources 
of  international  irritation,  and  hasten  thereby  united  or 
concerted  action  of  the  powers  at  Peking  in  favor  of 
the  administrative  reforms  so  urgently  needed  for 
strengthening  the  Imperial  Government  a.id  maintaining 
the  integrity  of  China  in  which  the  whole  western  world 
is  alike  concerned.  It  believes  that  such  a  result  may 
be  greatly  assisted  by  a  declaration  by  the  various  powers 
claiming  'spheres  of  interest'  in  China  of  their  intentions 
as  regards  treatment  of  foreign  trade  therein.  The  pres- 
ent moment  seems  a  particularly  opportune  one  for  in- 
forming Her  Britannic  Majesty's  Government  of  the 
desire  of  the  United  States  to  see  it  make  a  formal  decla- 
ration and  to  lend  its  support  to  obtaining  similar  declara- 
tions from  the  various  powers  claiming  'spheres  of 
influence'  in  China,  to  the  effect  that  each  in  its  respective 
sphere  of  interest  or  influence — 

"First,  will  in  nowise  interfere  with  any  treaty  port 
or  any  vested  interest  within  any  so-called  'sphere  of 
interest,'  or  leased  territory  it  may  have  in  China. 

"Second,  that  the  Chinese  treaty  tariff  of  the  time  being 
shall  apply  to  all  merchandise  landed  or  shipped  t<>  all 
such  ports  as  are  within  said  'sphere  of  interest'  (unless 
they  be  'free  ports'),  no  matter  to  what  nationality  it  may 
belong,  and  that  duties  SO  leviable  shall  be  collected  by 
the  Chinese  Government. 

"Third,   that   it    will   levy  no   higher   harbor   dues   on 

Is  of  another  nationality  frequenting  any  port   in 

such  '  than  shall  be  levied  on  vess  :1s  of  ii^  own 

nationality,    and    no    higher    railroad    charge-    over    lines, 

controlled   or  operated  within   its  sphere  OH   merchandise 

belonging  to  citizens  or  subjects  of  other  nationalities 
transported  tl  uch  'sphere'  than  shall  be  levied 

on  similar  merchandise  belonging  t<»  its  own  nationals 
transferred  over  equal  distance." 

To  this  note  all  the  Towers  addressed  replied  in  favor, 

generally  with  the   reservation   that    the  other    Powers 


152    POLICIES  OF  GREAT  POWERS  IN  CHINA 

should  concur,  and  with  the  exception,  however,  of  Rus- 
sia, who  was  significantly  silent  on  the  uniformity  of 
harbor  dues  and  railroad  charges.0  On  March  20,  1900, 
having  received  all  the  replies,  John  I  lav  informed  the 
Powers  that 

"the  condition  originally  attached  to  its  acceptance  .  .  . 
that  all  other  powers  concerned  should  likewise  accept 
the  proposals  of  the  United  States  .  .  .  having  been  com- 
plied with,  this  Government  will  therefore  consider  the 
assent  given  to  it  by as  final  and  defini- 
tive." 10 

Interpreting  the  doctrine  as  formulated  by  John  Hay, 
we  can  safely  say  that  the  first  principle  of  the  Open 
Door  policy  is  the  equal  opportunity  of  trade.  As  postu- 
lated by  John  Hay,  this  equal  opportunity  of  trade  is 
to  be  obtained  by  the  maintenance  of  the  Chinese  treaty 
tariff  for  the  time  being  whose  collection  at  the  treaty 
ports  is  to  be  left  in  the  hands  of  the  Chinese  Govern- 
ment, which  means,  of  course,  uniformity  of  tariff  and 
the  equal  treatment  of  foreign  merchants  of  whatever 
nationality  with  respect  to  importations  and  exportations. 
Further,  it  is  to  he  maintained  by  the  uniform  levy  of 
harbor  dues  and  railroad  charges,  which  means  the  equal 
treatment  of  all  nations  in  the  matter  of  transportation. 

This  principle  of  equal  opportunity  of  trade  does  not 
preclude  the  existence  of  spheres  of  influence.  In  fact, 
the  sphere  of  influence  was  quite  clearly  implied  and 
recognized  in  the  correspondence  of  John  Hay  for  the 
establishment  of  the  Open  Door  Doctrine.  Each  govern- 
ment addressed  was  requested  to  make  a  declaration  in 
favor  of  the  application  of  the  three  provisions  as  stipu- 
lated by  John  I  lay  "in  its  respective  spheres  of  inter* 
influence."11  The  firsl  of  the  three  provisions  was  that 
each  government  in  its  respective  sphere  would  in  nowise 
interfere  with  any  treaty  port  or  any  vested  interest 
within  any  so-called  "sphere  of  interest"  or  leased  ter- 


POLICY  OF  UNITED  STATES  IN  CHINA    153 

ritory  it  might  have  in  China,  thus  definitely  recognizing 
spheres  of  interest.  The  British  reply  12  specifically  stated 
that 

"Her  Majesty's  Government  will  he  prepared  to  make  a 
declaration  in  the  sense  desired  by  your  Government  in 
1  to  the  leased  territory  of  Weihaiwei  and  all  terri- 
tories in  China  which  may  hereafter  be  acquired  by  Great 
Britain  by  lease  or  otherwise,  and  all  spheres  of  interest 
now  held  or  that  may  hereafter  be  held  in  China  .  .   ." 

to  which  John  Hay  did  not  make  any  exception  or  objec- 
tion. In  subsequent  history,  when  Great  Britain  put  her 
mantle  of  influence  over  Tibet  in  1906  1:i  and  Russia  over 
Outer  Mongolia  in  1913  and  191 5,14  and  when  France 
secured  the  declaration  from  the  Chinese  Government  for 
a  preference  in  railroad  and  mining  enterprises  in 
Kwangsi  in  1914,15  the  United  States  Government  was 
not  reported  to  have  lodged  any  protest ;  and  in  1915  when 
Japan  made  Eastern  Inner  Mongolia  her  sphere  of  influ- 
ence and  South  Manchuria  virtually  her  exclusive  pre- 
serve, the  United  States  Government,  while  making  a 
general  declaration  reaffirming  the  Open  Door  policy  and 
reserving  the  right  of  exception  to  any  agreements  be- 
tween China  and  Japan  contrary  to  the  principles  of  the 
Open  Door  or  the  treaty  rights  of  the  United  States,  did 
not  make  any  specific  representations  of  protest  against 
the  provisions  regarding  Eastern  Inner  Mongolia  and 
South  Manchuria. 

\\  hat  John  Hay  opposed  was,  not  the  exigence  of 
spheres  of  influence  which  had  already  existed  before 
the  enunciation  of  his  doctrine,  but  rather  the  closing  of 
tin-  spheres  t<>  tin-  trade  of  the  world  or  the  assertion  of 

claims  to  exclusive  rights  within  the  spheres.      The  three 

provisions  as  postulated   by  John   Hay   were  designed 

to  keep   the   doors   open    in   the    various    spheres    thnui-h 

the  recognition  of  vested  interests  ami  the  maintenance 
of  the  Chinese   treat)    tariff  and  the  uniformity  of   bar- 


154    POLICIES  OF  GREAT  POWERS  IN  CHINA 

bor  dues  and  railway  charges;  in  other  words,  they  were 
to  secure  the  equal  treatment  of  foreign  merchants  within 
the  various  spheres.  In  his  original  note  to  Mr.  Choate, 
United  States  Ambassador  at  London,1'1  John  Hay  said: 

"While  the  Government  of  the-  United  States  will  in 
nowise  commit  itself  to  a  recognition  of  exclusive  rights 
of  any  power  within  or  control  over  any  portion  of  the 
Chinese  empire  under  such  agreements  as  have  within 
the  last  year  been  made,  it  cannot  conceal  its  apprehen- 
sion that  under  existing  conditions  there  is  a  possibility, 
even  a  probability,  of  complications  arising  between  the 
treaty  powers  which  may  imperil  the  rights  insured  to 
the  United  States  under  our  treaties  with  China." 

Again,  in  his  protest  against  the  proposed  convention 
between  China  and  Russia  respecting  Manchuria,  he 
wrote : 17 

"An  agreement  by  which  China  cedes  to  any  corpora- 
tion   or    company    the    exclusive    right    and    privilege    of 

opening  mines,  establishing  railroads,  or  in  any  other 
way  industrially  developing  Manchuria,  can  hut  he  viewed 
with  the  gravest  concern  by  the  United  States.  It  con- 
stitutes a  monopoly,  which  is  a  distinct  breach  of  the 
stipulations  of  treaties  concluded  between  China  and  for- 
eign powers,  and  thereby  seriously  affects  the-  rights  of 
American  citizens;  it  restricts  their  rightful  trade  and 
exposes  it  to  being  discriminated  against,  interfered  with, 
or  otherwise  jeopardized,  and  strongly  tends  toward  per- 
manently impairing  the  sovereign  rights  of  China  in  this 
part  of  the  empire,  and  seriously  interferes  with  her 
ability  to  meet  her  international  obligations.  Further- 
.  such  concessions  on  the  part  of  China  will  un- 
doubtedly be  followed  by  demands  from  other  powers  for 

similar  and  equal  exclusive  advantages  in  other  parts 
of  the  Chinese  Empire,  and  the  inevitable  result  mu  I  be 
the  complete  wreck  of  the  policy  of  absolute  equality 

of  treatment  of  all  nations  in  regard  to  trade,  naviga- 
tion and  commerce  within  the  confines  of  the  Empire." 


POLICY  OF  UNITED  STATES  IN  CHINA    155 

Subsequently,  when  in  1903  Russia  demanded,  in  her 
Seven  Articles,  as  conditions  for  the  further  evacuation 
of  Manchuria,18  thai  without  the  consent  of  Russia  no 
new  treaty  port  be  opened  or  consuls  admitted  (Art.  3), 
and  no  foreigners,  except  Russians,  be  employed  in 
the  public  service  of  North  China,  thus  extending  author- 
ity over  the  affairs  of  North  China.  John  Hay  protested 
against  the  exclusion  of  other  foreigners  from  public 
service  in  North  China,  and  as  a  measure  of  upholding 
the  Open  Door  in  Manchuria,  demanded  the  opening  of 
treaty  ports  in  that  region.19  As  a  consequence,  and  in 
conjunction  with  the  Treaty  of  Commerce  signed  on  Oc- 
tober 8,  1913,-°  Mukden  and  Antung  in  Manchuria  were 
opened  to  trade  (Art.  12),  thus  successfully  asserting 
the  Open  Door  doctrine  and  preventing  Manchuria  from 
being  closed  to  the  trade  of  the  world. 

Thus  the  first  principle  of  the  Open  Door  policy,  as 
we  have  seen,  is  the  equal  opportunity  of  trade  within 
the  various  spheres  of  influence.  Now  let  us  consider 
the  second  principle  of  the  doctrine,  which  is  equally 
as  important,  if  not  more  so:  namely,  the  integrity  of 
China.  In  the  first  circular  note  of  September  6,  1899, 
John  Hay  did  not  make  the  preservation  of  the  integrity 
of  China  the  primary  object  of  his  policy.  What  we 
can  gather  from  a  close  scrutiny  of  his  correspondence 
was  that  the  integrity  of  China  was  to  him  an  implied 
condition  of  his  policy,  or  a  presumed  prerequisite  for 
the  successful  operation  of  his  policy.  For  should  China 
be  partitioned   or   should   tin-  of   influence 

into  regions  of  foreign  control,  there  would  he-  a  eon- 
sequent  closing  oi  the  various  regions  and  there  would 
thus  he  no  room  and  no  necessity  for  the  Open  Door 
Doctrine.  Quite  in  line  with  this  reasoning,  John  May 
said,  in  his  first  circular  note:-' 

"This  Government  .  .  .  hopes  also  t « »  retain  there  an 
open  markel    for  the  commerce  of   the   world,  remove 


156    POLICIES  OF  GREAT  POWERS  IN  CHINA 

dangerous  sources  of  international  irritation  and  hasten 
thereb)  united  and  concerted  action  of  the  Powers  at 
Peking  in  favor  of  the  administrative  n  i  urgently 

needed  for  strengthening  the  Imperial  Government  and 
maintaining  the  integrity  of  China.  .  .  ." 

"The  declaration  of  such  principles  .  .  .  would  give 
additional  weight  to  the  concerted  representations  which 
the  treaty  powers  may  hereafter  make  to   His  Imperial 

Chinese  Majesty  in  the  interest  of  reform  in  Chinese 
administration  so  essential  to  the  consolidation  and  in- 
tegrity of  the  empire.  .  .  ."  M 

Besides,  the  the  second  provision  of  his  proposal   was 

"that  the  Chinese  treaty  tariff  of  the  time  being  shall 
apply  to  all  merchandise  landed  or  shipped  to  all  such 
ports  as  are  within  said  'sphere  of  interest'  (unless  they 
he  'free  ports'),  no  matter  to  what  nationality  it  may 
helong,  that  duties  so  leviable  shall  be  collected  by  the 
Chinese  Government." 

This  provision  of  requiring  the  maintenance  of  the 
Chinese  treaty  tariff  and  of  collection  thereof  by  the 
Chinese  authorities  presupposes  the  existence  of  the  sov- 
ereignty and  integrity  of  China. 

During  the  Boxer  Uprising,  when  China  was  threat- 
ened with  the  peril  of  dismemberment,  John  I  lay  brought 
to  the  forefront  the  second  principle  of  his  doctrine,  the 
integrity  of  China: 

"The  policy  of  the  Government  of  the  United  States 
is  to  seek  a  solution  which  may  bring  about  permanent 
safety  and  peace  to  China,  preserve  (  llinese  territorial 
and  administrative  entity,  protect  all  rights  guaranteed 
to  friendly  powers  by  treaty  and  International  law  and 

safeguard  for  the  world  the  principle  of  equal  and  im- 
partial trade  with  all  parts  of  the  Chinee  Empire."*8 

In  his  reply  to  Great  Britain  concerning  the  Anglo- 
( rerman  agreement  of  October  16,   1900,  he  placed  an 


POLICY  OF  UNITED  STATES  IN  CHINA    157 

emphasis  on  the  principle  of  the  integrity  of  China  equal 
to  that  of  equal  opportunity  of  trade: 

"During  the  last  year  this  Government  invited  the 
Powers  interested  in  China  to  join  in  an  expression 
of  views  and  purposes  in  the  direction  of  impartial  trade 
with  that  country  and  received  satisfactory  assurances 
to  that  effect  from  all  of  them.  When  the  recent  troubles 
were  at  their  height,  this  Government,  on  the  third  of 
July,  once  more  made  an  announcement  of  its  policy 
regarding  impartial  trade  and  the  integrity  of  the  Chinese 
Empire,  and  had  the  gratification  of  learning  that  all 
the  Powers  held  similar  views."  2i 

From  this  time  on,  the  Open  Door  policy  of  the  United 
States  has  been  understood  to  consist  of  two  leading  prin- 
ciples :  namely,  the  equal  opportunity  of  trade  and  the 
integrity  of  China.  In  subsequent  declarations  or  agree- 
ments respecting  the  policy,  these  two  principles  are 
always  mentioned  side  by  side.  In  his  circular  note  of 
January  13,  1905,  issued  in  response  to  the  request  of 
the  then  Kaiser,  William  II,  to  forestall  any  territorial 
spoliation  of  China  in  consequence  of  the  Russo-Japanese 
War,  John  Hay  said: 

"For  its  part,  the  United  States  .  .  .  has  been  grati- 
fied at  the  cordial  welcome  accorded  to  its  efforts  to 
Strengthen  and  perpetuate  the  broad  policy  of  maintaining 
the  integrity  of  China  and  the  'Open  Door'  in  the  Orient, 
whereby  equality  of  commercial  opportunity  and  access 
shall  be  enjoyed  by  all  nations." -:' 

In  the  statements  given  to  the  press  relating  to  the 
neutralization  plan  for  the  Manchurian  railways,'-'"  there 
was  found  the  statement: 

"As  is  well  known,  the  essential  principles  of  the  Hay 
policy   of   the   Open   Door  are   the    preservation   of   the 

territorial    and    jurisdictional    integrity    of    the    Chinese 


158    POLICIES  OF  GREAT  POWERS  IN  CHINA 

Empire,  and  equal  commercial  opportunity  in  China  for 
all  oatioi 

In  the  Root-Takahara  agreements,  and  recently  in  the 

United  States  declaration  in  connection  with  Japan's 
Twent)  one  Demands,  and  the  Lansing-Ishii  agreement, 
the  same  principles  were  reiterated  and  reaffirmed. 

1  [aving  thus  seen  the  essential  principles  of  the  Open 
Door  doctrine,  let  us  analyze  the  meaning  of  the  integrity 
of  China.  By  the  integrity  of  China  may  be  meant  terri- 
torial integrity,  or  sovereignty,  or  administrative  integ- 
rity. As  to  the  first  meaning — the  territorial  integrity 
of  China — there  can  be  almost  no  dispute.  John  Hay's 
circular  note  of  July  3,  1900,  clearly  referred  to  the 
preservation  of  territorial  integrity : 

"The  policy  of  the  Government  of  the  United  States 
is  to  seek  a  solution  which  may  bring  about  permanent 
safety  and  peace  to  China,  preserve  Chinese  territorial 
and  administrative  entity.  .  .  ."  -7 

The  reply  to  the  British  Government  respecting  the 
Anglo-German  agreement  was  given  in  response  to  the 
request  to  concur  in  the  principles  of  the  equal  oppor- 
tunity of  trade  and  that 

"Her  Britannic  Majesty's  Government  and  the  Impe- 
rial German  Government  will  no1  on  their  part  make  use 
of  the  present  complication  to  obtain  for  themselves  any 
territorial  advantages  in  Chinese  dominions  and  will  di- 
rect their  policy  toward  maintaining  undimnished  the  ter- 
ritorial condition  of  the  Chinese  Empire."  28 

In  subsequent  agreements  or  declarations  when  the 
phrase  "the  integrity  of  China"  was  employed,  its  mean- 
ing as  to  territorial  integrity  was  never  questioned. 

Respecting  the  second  meaning — the  sovereignty  of 
China — there  is  a  general  agreement  among  the  Powers 


POLICY  OF  UNITED  STATES  IN  CHINA     159 

that  the  integrity  of  China  means  the  sovereignty  of 
China.  In  the  Harbin  case,  when  Russia  attempted  to 
set  up  a  municipal  government  in  Chinese  territory,  the 
United  States  Government  protested,  and  contended  that, 
by  the  Treaty  of  Portsmouth,  Russia  had  obligated  her- 
self to  observe  "a  scrupulous  regard  for  the  sovereignty 
of  China,"  and  that  certain  of  the  municipal  ordinances 
"would  be  a  clear  infringement  upon  the  sovereignty  of 
China,"  -'■'  and  that 

"this  principle,  which  this  Government  concedes  to  be 
the  true  one,  is,  in  substance,  that  the  only  basis  for  the 
exercise  of  governmental  rights  on  the  part  of  the  offi- 
cials of  any  country  other  than  China  within  the  Chinese 
Empire  should  lie  in  the  extraterritorial  rights  granted  by 
the  treaties  of  China  to  the  several  Powers." 

Thus,  in  this  case,  the  United  States  Government  took 
the  attitude  that  the  sovereignty  of  China  must  be  re- 
spected, and  that  the  exercise  of  any  jurisdictional  author- 
ity must  be  based  on  extraterritorial  grants.  In  the  state- 
ment given  to  the  press  with  regard  to  the  neutralization 
of  the  Manchurian  railways,  the  phrase  "jurisdictional 
integrity"  of  China  was  employed  side  by  side  with  terri- 
torial integrity : 

"As  is  well  known,  the  essential  principles  of  the  Hay 
policy  of  the  Open  Door  are  the  preservation  of  the 
territorial  and  jurisdictional  integrity  of  the  Chinese  Em- 
pire, and  equal  commercial  opportunity  in  China  for  all 
nations."  30 

In  the  IVanco-Japancse  agreement  of  1907,  the  Russo- 
Japanese  agreement  of  1907,  the  Root-Takahira  a 
ment  of  1908,  and  the  Lansing-Ishii  agreement  of  1917, 
the  Anglo-Japanese  Alliance  of  1905  and  1911 w — in  all 
agreements  the  expression  was  used,  "the  independ- 
ence and  integrity  of  China," 

As  regards  the  third  meaning — the  administrative  in- 


160    POLICIES  OF  GREAT  TOWERS  IN  CHINA 

tegrity  of  China — there  is  no  such  unanimity  of  opinion, 
hut  rather  a  division  of  the  same.  It  is  claimed  that 
the  Open  Door  principles  do  not  apply  to,  nor  include, 
the  administrative  integrity  of  China.  Reference  is  made, 
as  illustrations,  to  the  Chinese  Salt  Administration  and 
the  .Maritime  Customs  Service,  which  are  all  under  for- 
eign supervision.  On  the  other  hand,  it  is  contended 
that  the  Open  Door  Doctrine  applies  to,  and  includes, 
the  administrative  integrity  of  China.  For  administra- 
tive integrity  is  a  necessary  element  of  territorial  entity 
and  sovereignty,  the  want  of  which  will  render  the  juris- 
dictional authority  nothing  more  than  a  name.  In  the 
second  circular  of  July  3,  1900,  John  Hay  did  mention 
the  preservation  of  the  administrative  integrity  of  China 
as  one  of  the  objectives  of  his  policy: 

"The  policy  of  the  Government  of  the  United  States 
is  to  .  .  .  preserve  Chinese  territorial  and  administrative 
entity.  .  .  ."  32 

In  1913,  when  Wilson  withdrew  the  support  of  the  United 
States  Government  from  the  American  group  in  the 
Sextuple  Consortium,  resulting  in  the  withdrawal  of 
the  American  hankers  therefrom,  he  based  his  objection 
on  the  ground  that  the  reorganization  loan  touched  the 
administrative  integrity  of  China.33 

"The  conditions  of  the  loan  seem  to  us  to  touch  very 
nearly  the  administrative  independence  of  China  itself 
and  this  administration  does  not  feel  that  it  ought,  even 
by  implication,  to  be  a  party  to  these  conditions.  The 
responsibility  on  its  part  which  would  he  implied  in  re- 
questing  the  hankers  to  undertake  the  loan  might  con- 
ceivably go  the  length  in  some  unhappy  contingency  of 
forcible  interference  in  the  financial,  and  even  the  politi- 
cal affairs  of  that  great  Oriental  state,  just  now  awaken- 
ing to  a  consciousness  of  its  power  and  of  its  obligations 
to  its  people." 


POLICY  OF  UNITED  STATES  IN  CHINA    161 

Although  this  policy  of  non-participation  was  reversed 
later  in  1916  34A  and  1918,**D  the  reentrance  of  American 
finance  into  China,  now  in  the  form  of  the  New  Inter- 
national Banking  Consortium,  did  not  mean  to  infringe 
or  destroy  the  administrative  integrity  of  China,  but 
rather  to  uphold  and  save  the  same  from  the  consequences 
of  extravagance  and  corruption.  This  interpretation  of 
the  Open  Door  doctrine  as  including  the  administrative 
integrity  of  China  does  not,  however,  preclude  the  possi- 
bility and  probability  of  active  intervention  in  the  finances 
of  China,  in  case  of  bankruptcy  or  insolvency.  In  this 
contingency,  the  supervision  or  control  necessitated  by 
the  situation  would  be  undertaken,  not  in  the  spirit,  or 
with  the  intention,  to  infringe  or  nullify  the  administra- 
tive integrity  of  China,  but  rather  to  uphold  and  save  the 
same  with  a  view  to  restoring  it  eventually  to  the  Chinese 
Government. 

Having  thus  seen  the  meaning  of  the  Open  Door  doc- 
trine with  respect  to  the  integrity  of  China,  let  us  inquire 
into  another  problem  which  has  often  been  noted,  and 
that  is,  Does  the  Open  Door  doctrine  apply  to  railways 
in  China?  Is  the  principle  of  equal  opportunity  applica- 
ble in  their  case?  In  the  Anglo-Japanese  Alliance  of 
1905  and  1911 M  and  the  Lansing-Ishii  agreement  of 
1917, !'!  mention  was  made  only  for  the  "equal  opportunity 
for  commerce  and  industry  in  China."  Railways  were 
not  mentioned,  unless  by  a  liberal  construction  they  were 
included  under  the  category  of  "commerce  and  industry." 
On  the  other  hand,  railways  are  apt  to  control  the  eco- 
nomic life  of  any  territory  through  which  they  pass,  and 
Unless    the    powers   obtain    equal    share    in    railways,    the 

trade  of  the  regions  are  liable  to  be  dominated  by  the 
pou<  r  or  powers  controlling  the  railways.  Furthermore, 
as  trade  follows  loans,  railway  loans  musl  be  shared  by 
all  in  ord<  lire  the  equal  opportunity  in  supplying 

materials  and  other  i  3  for  raihsa. 


162    POLICIES  OF  GREAT  POWERS  IN  CHINA 

In  spite  of  these  conflicting  opinions,  it  may  be  con- 
cluded, however,  that  the  Open  Door  doctrine  does  apply 
to  railways  in  China,  with  the  reservation  or  condition 

that  vested  interests  are  to  be  respected.  This  conclusion 
conforms  with  the  original  doctrine  as  set  forth  by  John 
1  lav  and  the  subsequent  development  and  application  of 
the  principles.  To  repeat,  the  first  of  the  three  provi- 
sions as  set  forth  in  John  Hay's  Circular  Note  of  Sep- 
tember 6,  1899,  was  that  each  Government  in  its  respec- 
tive spheres  of  interest  or  influence  "will  in  nowise  inter- 
fere with  any  treaty  port  or  any  vested  interest  within 
any  so-called  'sphere  of  interest'  or  leased  territory  it  may 
have  in  China." 3T  Thus  vested  interests  of  whatever 
nationality  and  in  whatever  spheres  of  influence  are  to 
be  respected.  In  applying  this  principle  to  railways,  it 
cannot  mean  any  other  arrangement  than  that  those 
already  constructed  or  under  construction  in  any  spheres 
of  interest  should  be  accorded  due  recognition  and  re- 
spect. Except  for  this  reservation,  the  Open  Door  doc- 
trine applies  to  railways  just  as  it  does  to  commerce  and 
industry.  In  1902,  when  Russia  attempted  to  monopolize 
the  economic  development  of  Manchuria  through  the 
agency  of  a  corporation,  John  Hay  vigorously  protected 
against  the  proposed  convention,  in  which  he  made  the 
specific  mention  of  railways  as  being  included  within  the 
scope  of  his  objection: 

"Any  agreement  by  which  China  cedes  to  any  corpora- 
tion or  company  the  exclusive  right  or  privilege  of  open- 
ing mines,  establishing  railroads  .  .  .  can  but  be  viewed 
with  gravest  concern  by  the  United  States.' 

In  the  proposal  for  the  neutralization  of  the  Manchurian 
railways,  Knox  put  the  emphasis  on  their  neutralization 
as  the  most  effective  means  of  maintaining  the  principles 
of  the  Open  Door  doctrine. 

"First,  perhaps  the  most  effective  way  to  preserve  the 

undisturbed  employment  by  China  of  all  political  rights 


POLICY  OF  UNITED  STATES  IN  CHINA    163 

in  China  and  to  promote  the  development  of  those  prov- 
inces under  a  practical  application  of  the  policy  of  the 
Open  Door  and  equal  commercial  opportunity  would  be 
to  bring  the  Manchurian  highways,  the  railroads,  under 
an  economic,  scientific  and  impartial  administration  by 
some  plan  vesting  in  China  the  ownership  of  the  railroads 
through  funds  furnished  for  that  purpose  by  the  inter- 
ested  powers   willing   to  participate.  .  .  ." 30 

Although  the  plan,  as  is  well  known,  was  defeated 
mainly  by  the  opposition  of  Japan  and  Russia,  it  is 
obvious  that  the  Open  Door  doctrine  does  apply  to  rail- 
ways. Besides,  notwithstanding  the  failure  of  the  neu- 
tralization plan,  in  the  formation  of  the  New  International 
Banking  Consortum,  the  United  States  Government  pro- 
posed : 

"That  not  only  future  options  that  might  be  granted 
but  concessions  already  held  by  individual  banking  groups 
Otl  which  substantial  progress  had  not  been  made,  should, 
as  far  as  feasible,  be  pooled  with  the  Consortium ;  that 
working  on  these  two  principles,  the  operations  of  the 
Consortium  would  serve  to  prevent  for  the  future  the 
setting  up  of  special  spheres  of  influence  on  the  conti- 
nent of  Asia.  The  United  States  Government  laid  great 
stress  on  this  latter  point  as  being  highly  effective  in 
doing  away  with  international  jealousies  and  in  helping  to 
preserve  the  integrity  and  independence  of  China."  4U 

Thus,  the  United  States  Government  proposed  to  re- 
spect the  vested  interests  of  the  existing  railways  and 
the  railways  on  which  substaneial  progress  had  been 
made,  hut  at  the  same  time  to  pool  or  internationalize  all 
future  option-,  and  existing  concessions  in  railway 
which  substantia]  progress  had  not  been  made. 

isoning  from  the  neutralization  plan  and  the  policy 
of  the  New  Consortium  with  respect  to  railways,  the 
conclusion  can  be  safely  reached  that  the  <  >|>in  Door 
doctrine  does  apply  to  railways  in  China  with  the  sole 


164    POLICIES  OF  GREAT  POWERS  IN  CHINA 

reservation  thai  vested  interests  of  the  existing  railways 
will  be  accorded  due  respect.  And  derivable  from  the 
same  facts,  a  new  principle,  or  corollary  to  the  principles 
of  the  Open  Door  doctrine,  can  also  he  obtained,  and 
that  is  the  internationalization  of  these  railways.  Kail- 
ways  are  usually  monopolies.  As  such  they  are  not 
supposed  to  be  subject  to  competition  as  the  other  forms 
of  economic  enterprises,  where  competition  is  permissible 
and  wholesome.  When  and  where  they  are  subject  to 
competition,  the  inevitable  outcome  is  either  the  destruc- 
tion of  both,  or  all  lines,  or  their  agreement  and  coopera- 
tion, and  in  some  cases,  even  combination.  As  the  Open 
Door  principle  of  equal  opportunity  presupposes  com- 
petition, it  meets  the  stone  wall  of  this  economic  princi- 
ple governing  railways,  that  is,  they  are  monopolies  and 
not  open  to  competition.  Confronted  with  this  difficulty, 
the  exponents  of  the  Open  Door  doctrine  can  either  refuse 
to  apply  it  to  railways,  excluding  them  as  being  outside 
of  the  field  of  competition,  as  evidenced  by  the  demarca- 
tion of  the  various  spheres  of  influence  for  the  construc- 
tion of  railways  in  China,  or  they  must  resort  to  the 
only  and  inevitable  alternative  or  solution,  under  which 
the  Open  Door  policy  can  be  safely  and  beneficially  ap- 
plied, that  is,  the  internationalization  of  Chinese  railways. 
It  is  for  this  reason  that  the  neutralization  plan  was  pro- 
posed, and  it  is  for  the  same  reason  that  the  New  Con- 
sortium adopted  the  policy  of  the  internationalization 
or  the  pooling  of  all  railway  options.  The  thesis  may, 
therefore,  be  proposed  that  henceforth  the  internation- 
alization of  railways  in  China,  so  far  as  the  Open  Door 
doctrine  is  applied  to  them,  will  become  a  new  princi- 
ple, or  corallory  to  the  leading  principles,  of  the  Open 
Door  doctrine. 

In  addition  to  the  internationalization  of  railways, 
another  question  may  be  raised  and  that  is  as  to  how 
the  Open  Door  doctrine  can  be  held  to  agree  with  a 


POLICY  OF  UNITED  STATES  IN  CHINA    165 

recognition  of  Japan's  special  interest  in  China  as  em- 
bodied in  the  Lansing-lshii  agreement  of  November  2, 
1917.     That  agreement  provided  that 

"The  governments  of  the  Untied  States  and  Japan 
recognized  that  territorial  propinquity  creates  special  re- 
lations between  countries,  and  consequently  the  govern- 
ment of  the  United  States  recognizes  that  Japan  has 
special  interests  in  China,  particularly  in  the  part  to 
which  her  possessions  are  contiguous."  41 

From  a  superficial  examination  of  the  Open  Door  doc- 
trine and  the  principle  of  special  interests,  the  conclu- 
sion cannot  be  escaped  that  the  recognition  of  such  in- 
terests is  contrary,  and  inconsistent,  to  the  Open  Door 
doctrine.  For  "special  interests"  must  mean  interests 
which  are  special,  or,  in  other  words,  exclusive  to  Japan. 
Yet,  the  Open  Door  doctrine  proclaims  the  gospel  of 
equal  opportunity,  barring  any  exclusive  claims. 

From  a  close  scrutiny,  however,  of  the  agreement  and 
Secretary  Lansing's  testimony  before  the  Committee  on 
Foreign  Relations  of  the  United  States  Senate,  the  im- 
ion  of  inconsistency  yields  to  a  more  sympathetic 
conclusion  that  the  recognition  of  Japan's  special  in- 
terests was  not  inconsistent,  but  rather  in  consonance, 
with  the  Open  Door  doctrine.  Lansing  recognized  Jap- 
an's special  interest  in  China  as  of  the  same  character  as 
the  special  interests  of  the  United  States  in  Mexico,  or 
Canada,   or   the   Latin-American    Republics.      I  lis   own 

testimony  in  the  Senate  clearly  bears  evidence  to  his  in- 
tention and  interpretation: 

"...  I  told  him  then  that  if  it  meant  'paramount 
interest,'  I  could  not  discuss  it  further;  but  it  he  meant 
special  interesl  based  upon  geographical  position,  1  would 
consider  the  insertion  of  it  in  the  note.  Then  it  was, 
during  that  same  interview,  that  we  mentioned  'paramount 
interest'  and  he  made  a  reference  to  the  Monroe   Doc- 


166    POLICIES  OF  GREAT  POWERS  IN  CHINA 

trine,   and    rather  a   suggestion   that   there   should   be   a 
Monroe  Doctrine  for  the  Far  East. 

"And  I  told  him  that  there  seemed  to  he  a  misconcep- 
tion as  to  the  underlying  principle  of  the  Monroe  Doc- 
trine; that  it  was  not  an  assertion  of  primacy  or  'para- 
mount interest'  by  the  United  States  in  its  relations  to 
other  American  Republics;  that  its  purpose  was  to  pre- 
vent foreign  powers  from  interfering  with  the  separate 
rights  of  any  nation  in  this  hemisphere,  and  that  the 
whole  aim  was  to  preserve  to  each  republic  the  power 
of  self-development.  .  .  ." 42 

Again  in  his  statement  of  November  6,  1917.  in  explana- 
tion of  the  agreement,  Mr.  Lansing  stated:  ' 

"The  statements  in  the  notes  recpiire  no  explanation. 
They  not  only  contain  a  re-affirmation  of  the  'Open  Door' 
policy,  but  introduce  a  principle  of  non-interference  with 
the  sovereignty  and  territorial  integrity  of  China,  which, 
generally  applied,  is  essential  to  {perpetual  international 
peace  as  clearly  declared  by  President  Wilson  and  which 
is  the  very  foundation  of  Pan-Americanism  as  inter- 
preted by  this  government." 

From  his  own  testimony  and  statement,  the  conclu- 
sion may  be  drawn  that  in  recognizing  Japan's  "special 
interests,"  Secretary  Lansing  recognized  Japan's  pro- 
fessed Monroe  Doctrine  in  China,  or  at  least  its  leading 
principle — Japan's  right  to  enforce,  both  on  herself  and 
the  other  Powers,  the  obligation  of  non-interference  with 
the  sovereignty  and  territorial  integrity  of  China.  Re- 
grettable as  the  fact  that  no  definition  of  "special  in- 
terests" was  given  in  the  agreement  may  be.  the  inter- 
pretation of  Mr.  Lansing  stamps  the  expression  'special 
interests"  with  the  indelible  meaning  of  non-interfer- 
ence with  the  sovereignty  and  territorial  integrity  of 
China.  As  such,  and  as  the  Open  Door  doctrine  pro- 
poses to  preserve  the  same  sovereignty  and  territorial  in- 
tegrity of  China,  the  recognition  of  the  special  interests 


POLICY  OF  UNITED  STATES  IN  CHINA    1C7 

of   Japan    was  not   inconsistent    but    rather   in   harmony, 
with  the  principles  of  the  Open  Door  doctrine.44 

If,  however,  the  special  interests  of  Japan  arc  inter- 
preted to  mean  -rested  interests,  then  the  (  'pen  Door  doc- 
trine recognizes,  and  accords  them  due  respect.  The 
compromise  reached  at  Tokio  between  Thomas  \\  .  I.a- 
mont  and  the  Japanese  Government  respecting  the  Japan- 
ese special  interests  in  South  Manchuria  and  E 
Inner  Mongolia,  which  were  interpreted  to  mean  . 
interests,  goes  to  show  that  special  interests  in  vested 
right.-  are  not  inconsistent  with  the  (  >pen  Door 
doctrine. 

Having  seen  its  meaning,  let  us  pass  on  to  the  condi- 
requisite  for  successful  application.  It  is  not  a 
part  of  international  law,  but  a  mere  international  agree- 
ment among  the  powers  interested  in  China,  and  under- 
taken on  the  condition  that  the  other  Powers  would  ob- 
tlie  same.  It  has  therefore  no  other  sanction  for 
its  enforcement  than  the  moral  validity  of  the  doctrine, 
or  the  physical  force  that  each  state  may  chot 
behind  it.  Besides,  it  is  an  agreement  among  the  Powers 
inter  se  to  which  China  is  not  a  party.  "She,  therefore, 
technically  speaking,  cannot  be  said  to  have  gained  any 
contractual  or  conventional  rights  from  or  under  them."  '"' 
It  seems,  therefore,  that  except  for  the  fulfillment  of  cer- 
tain  conditions,  the  application  of  the  doctrine  is  likely 
to  fail. 

The  firsl  necessary  condition  is  the  cooperation  of 
China.  Unless  she  obeys  the  doctrine,  it  is  hopel< 
expeel  it-  successful  operation.  For  China  can  grant 
il  privileges  and  thus  violate  the  principle  of  the 
equal  opportunity  of  trade,  with  the  consequence  that 
the  Powers  thu>  discriminated  against  will  1"'  obliged 
io  claim  similar  or  equivalenl  privileges,  in  which  case, 
the  United  States  will  he  helpless  to  check  the  Towers 
from  a  scramble.  The  protesl  of  Hay,  against  the  grant 
to  Russia,  through  a  corporation,  of  the  monopoly  of  the 


168    POLICIES  OF  GREAT  POWERS  IN  CHINA 

industrial  development  of  Manchuria,  was  based  specifi- 
cally "ii  this  ground. 

"...  Furthermore,  such  concessions  on  the  part  of 
China  will  undoubtedly  be  followed  by  demands  from 
other  powers  for  similar  and  equal  exclusive  advantages 
in  other  parts  of  the  Chinese  Empire  and  the  inevitable 
result  must  be  the  complete  wreck  of  the  policy  of  abso- 
lute equality  of  treatment  of  all  nations  in  regard  to 
trade,  navigation,  and  commerce  within  the  confines  of 
the  empire."  46 

Again,  China  may  voluntarily  alienate,  or  barter  away, 
or  forfeit  her  territory  and  sovereignty,  in  which  case, 
the  United  States  will  be  powerless  to  assist  in  any  way, 
much  as  she  may  wish  to  do  so.  As  Professor  \Y.  W. 
Willoughby  has  well  said: 

"China  will,  therefore,  be  ill-advised  if  she  does  not 
bear  constantly  in  mind  the  fate  of  Korea.  That  country 
had  had  its  sovereignty  guaranteed  by  several  of  the 
Powers,  and  especially  and  repeatedly  by  Japan,  and 
yet,  when  Japan  exhibited  to  the  world  a  document  pur- 
porting to  be  a  treaty  signed  by  the  government  of  K 
consenting  to  annexation,  the  other  Powers,  even  those 
which,  like  the  United  States,  had  promised  to  exert  good 
offices  in  case  other  powers  should  threaten  it,  did  not 
feel  called  upon  to  go  back  to  the  formal  instrument  of 
annexation  in  order  to  determine  the  circumstances  under 
which  it  had  been  negotiated  and  the  signatures  to  it 
obtained."  47 

Finally,  China  may  let  extravagance,  corruption,  civil 
nsioil  and  militarism  so  infest  and  strangle  her  gov- 
ernment   as   to    render   her   bankrupt,    in   which   cast-    the 

United  States,  regretting  to  intervene,  will  be  compelled, 

ill  mn junction  with  the  other  interested  Powers,  to  take 
over  the  finances  of  China  and,  by  so  doing,  practically 
destroy    her    administrative    integrity.      In    short,    China 


POLICY  OF  UNITED  STATES  IN  CHINA    169 

must  cooperate  with  the  United  States  in  the  application 
of  the  Open  Door  doctrine  by  a  scrupulous  observance 
of  the  principles  of  the  equal  treatment  of  all  Powers 
and  of  the  preservation  of  her  own  integrity.  To  act 
otherwise  means  the  inevitable  doom  of  the  policy. 

Nor  must  China  hypnotize  herself  into  the  belief  that 
the  United  States  will  fight  for  her  integrity  and  so  fail 
to  provide  her  own  means  of  national  defense  or  to  resist 
foreign  aggression.  In  declaring  the  Open  Door  doctrine, 
the  United  States  Government  simply  states  its  own 
policy  or  attitude  and  asks  the  other  Powers  interested 
to  do  likewise.  But  she  does  not  pledge  the  enforcement 
thereof  by  her  own  military  and  naval  forces.  Prob- 
lematical as  it  may  be  as  to  whether  the  United  States 
will  ever  fight  for  China,  the  conclusion  may  be  safely 
ventured  that,  unless  China  fulfills  the  obligation  due  to 
herself,  by  defending  her  own  integrity  to  her  utmost 
ability,  the  United  States  will  not  feel  called  upon  to 
undertake  a  task  which  should  rest  on  the  shoulders  of 
the  Chinese  themselves.  The  Senate  reservation  to  Article 
10  of  the  Peace  Treaty  with  Germany  signed  at  Versailles 
on  June  28,  1919,  clearly  shows  that  except  at  the  dis- 
cretion and  direction  of  Congress,  the  United  States  will 
not  obligate  herself  to  defend  the  integrity  and  independ- 
ence of  another  state.48  Again,  when  Russia  violated 
the  Open  Door  in  Manchuria  and  refused  to  fulfill  her 
pledge  of  evacuation  except  upon  the  grant  of  seven  addi- 
tional demands,  Secretary  Hay  wrote  : 

"If  they  choose  to  disavow  Plancon  (the  Russian 
Charge  d'Affaires  at  Peking)  and  to  discontinue  to  vio- 
late tluir  agreements,  we  shall  be  all  right,  but  if  the  lie 

they  told  was  intended  to  serve  only  a  week  or  two,  the 
situation  will  become  a  serious  one.  The  Chinese  as  well 
as  the  Russians  seem  to  know  that  the  strength  of  our 
position  is  entirely  moral;  and  if  the  Russians  are  con- 
vinced that  we  will  not  fight  for  Manchuria  as  I  sup- 
pose we   will   not — and  the   Chinese  are   convinced   that 


170     POLICIES  OF  GREAT  POWERS  IN  CHINA 

they  have  nothing  but  good  to  receive  from  us  and  noth- 
ing bul  a  beating  from  Russia,  the  open  hand  will  not  he 
so  convincing  to  the  poor  devils  of  Chinks  as  tin-  raised 

club.  Still  we  must  do  the  best  we  can  with  the  means 
at  our  disposal."  60 

The  second  condition  necessary  for  the  successful  ap- 
plication of  the  Open  Door  policy  is  tin-  direct  participa- 
tion of  the  United  States  in  the  international  affairs  of 
China.  This  is  necessary,  because,  unless  the  1 
States  participates  in  the  affairs  and  sees  that  the  <  >pen 
Door  doctrine  is  observed,  the  other  Powers  will  fall 
back  into  the  practice  of  insisting  on  closed  spheres,  atul 
degenerate  into  the  old  international  struggle  for  con- 
cessions. This  was  clearly  shown  after  the  withdrawal 
of  the  American  Group  from  the  Sextuple  Consortium 
in  1913,  when,  in  absence  of  a  moral  leader  to  uphold  the 
Open  Door  doctrine,  the  Powers  resorted  to  another 
struggle  for  concessions  in  China  as  narrated  in  the  chap- 
ter on  International  Cooperation  and  Control.  In  addi- 
tion the  withdrawal  hindered  the  investment  of  American 
capital  in  China  and  thereby  reduced  the  trade  that  neces- 
sarily follows  the  loans.  This  harmful  effect  was  clearly 
voiced  by  the  complaint  of  the  American  Association  of 
China:"1 

"The  policy  of  the  United  States  Government  in  dis- 
couraging investment  of  American  capital  in  Chinese  rail- 
ways and  in  loans  to  the  Republic  has  been  detrimental 
to  our  merchants,  but  as  the  administration  gains  a  clearer 
view  of  the  situation  in  China  and  begins  to  recognize 
the  things  that  must  be  done  if  the  United  States  is  to 
share  in  this  vast  trade  area,  there  are  possibilities  of 
some  modifications  of  this  policy  which  is  believed  to 
have  been  put  forth  without  sufficient  investigation,  and, 

at  that,  on  sentimental  grounds.     This  association  should 

ery  means  in  its  power  to  awaken  the  government 

in   Washington,  through  whatever  means  it  can  find,  to 

the  necessity  of  a  more  vigorous  policy  in  China  to  secure 


POLICY  OF  UNITED  STATES  IN  CHINA    171 

for  us  and  to  uphold  open  when  secured  as  liberal 
advantages  for  the  extension  of  our  trade  as  are  now  en- 
joyed by  other  nationalities." 

Furthermore,  from  the  point  of  view  of  Chinese  na- 
tional interests,  the  withdrawal  of  the  United  States  left 
China  without  a  disinterested  friend  to  help  her  in  her 
dealings  with  other  Powers.  This  need  of  friendly  as- 
sistance and  mediation  is  set  forth  clearly  in  the  case  of 
the  Hukuang  Railway  Loan,  when  the  United  States  in- 
sisted on  participation  :  M 

"The  fact  that  the  loan  was  to  carry  an  Imperial  guar- 
anty and  be  secured  on  the  Internal  revenues  made  it  of 
the  greatest  importance  that  the  United  States  should 
participate  therein  in  order  that  this  government  might 
be  in  a  position  as  an  interested  party  to  exercise  an  in- 
fluence equal  to  that  of  any  of  the  other  three  Powers 
in  any  questions  arising  through  the  pledging  of  China's 
national  resources,  and  to  enable  the  United  States,  more- 
over, at  the  proper  time  again  to  support  China  in  urgent 
and  desirable  fiscal  administrative  reforms,  such  as  the 
abolition  of  likin,  the  revision  of  the  customs  tarill,  and 
general  fiscal  and  monetary  rehabilitation." 

As  American  participation  is  so  necessary,  and  espe- 
cially impelled  by  the  consideration  of  equipping  China 
for  active  participation  in  the  Great  War,  the  United 
States  Government,  in  1918,  reversed  its  policy  and 
mitted  American  capitali  ts  to  make  loans  to  China, 
backed  by  diplomatic  support.  The  participation  how- 
ever was  to  be  qualified  by  certain  conditions.  To  this 
effect,  tin-   I  >epai  tmenl   of   State   -aid  i 

"<  bina    declared    war    againsl    '  Icnnany    very    largely 

because  of  the  action  of  tin-  United  States.  Therefore 
this  government  has  fell  a  special  interest  in  the  desire  of 
('bina  bo  to  equip  herself  a-  to  be  of  more  specifi 

sistance  in  the  war  against  the  Central   Pow< 


172    POLICIES  OF  GREAT  POWERS  IN  CHINA 

"Until  the  present  time  the  engagements  of  the  United 
States  in  preparing  to  exert  effectively  its  strength  in 
the  European  theater  of  war  has  operated  to  prevent  spe- 
cific constructive  steps  to  help  China  realize  her  desires. 
Qtly,  however,  this  government  felt  that,  because  of 
the  approach  to  Chinese  territory  of  the  scenes  of  dis- 
order, a  special  effort  should  be  made  to  place  proper 
means  at  the  disposal  of  China.  Consequently  a  number 
of  American  hankers,  who  had  been  interested  in  the 
past  in  making  loans  to  China,  and  who  had  had  experi- 
ence in  the  Orient,  were  called  to  Washington  and  asked 
to  become  interested  in  the  matter.  The  bankers  re- 
sponded very  promptly  and  an  agreement  has  been  reached 
between  them  and  the  Department  of  State  which  has 
the  following  salient  features: 

"First,  the  formation  of  a  group  of  American  bankers 
to  make  a  loan  or  loans  and  to  consist  of  representatives 
from  different  parts  of  the  country. 

"Second,  an  assurance  on  the  part  of  the  bankers  that 
they  will  cooperate  with  the  government  and  follow  the 
policies  outlined  by  the  Department  of  State. 

"Third,  submission  of  the  names  of  the  banks  who  will 
compose  the  groups  for  approval  by  the  Department  of 
State. 

"Fourth,  submission  of  the  terms  and  conditions  of 
any  loan  or  loans  for  approval  by  the  Department  of 
State. 

"Fifth,  assurances  that,  if  the  terms  and  conditions 
of  the  loan  are  accepted  by  this  government  and  by  the 
government  to  which  the  loan  is  made,  in  order  to  en- 
courage and  facilitate  the  free  intercourse  between  Amer- 
ican citizens  and  foreign  states,  which  is  mutually  ad- 
vantageous, the  government  will  be  willing  to  aid  in 
every  way  possible  and  to  make  prompt  and  vigorous  rep- 
resentations and  to  take  every  possible  step  to  insure 
the  execution  of  equitable  contracts  made  in  good  faith 
by  its  citizens  in  foreign  lands. 

"It  is  hoped  that  the  American  group  will  be  associated 
with  bankers  of  Great  Britain,  Japan  and  France.  Nego- 
tiations are  now  in  progress  between  the  government 
of   the    United   States  and   those   governments   which   it 


POLICY  OF  UNITED  STATES  IN  CHINA    173 

is  hoped  will  result  in  their  cooperation  and  in  the  par- 
ticipation by  the  bankers  of  those  countries  in  equal  parts 
in  any  loan  which  may  be  made." 

The  third  condition  necessary  for  the  successful  ap- 
plication of  the  Open  Door  doctrine  is  the  cooperation 
or  the  Powers  interested.  That  this  is  necessary,  is  evi- 
denced by  the  fact  that  all  the  Powers,  except  Italy, 
addressed  by  Secretary  Hay  in  his  first  circular  note  of 
1899,  replied  favorably,  but  with  the  condition  that  the 
other  Powers  would  make  a  similar  declaration  respecting 
the  Open  Door  policy.  This  condition  means  that,  unless 
all  the  other  Powers  observe  the  Open  Door  doctrine, 
any  Power  promising  to  do  so,  is  not  bound  by  the  ob- 
ligation assumed.  Thus,  when  one  Power  commences 
to  seize  concessions,  the  others  do  not  feel  obligated  to 
restrain  themselves,  but,  on  the  contrary,  are  compelled 
to  do  likewise.  For  instance,  in  the  general  scramble  for 
concessions  in  1914  after  the  withdrawal  of  the  United 
States,  France  did  not  feel  obliged  to  abide  by  her  reply 
to  the  former  pledging  to  observe  the  Open  Door  doc- 
trine, but  felt  free  to  secure  from  the  Chinese  Govern- 
ment the  assurance,  that  in  Kwangsi,  preference  would  be 
given  to  French  interests  in  regard  to  railway  and  mining 
enterprises.  When  Russia  forced  her  joint  suzerainty 
with  China  over  Outer  Mongolia  in  1913,  Great  Britain 
did  not  feel  bound  by  her  own  pledge  of  1899  and  1900. 
On  the  contrary,  in  order  to  preserve  the  balance  of  power 
and  for  self-defense,  she  felt  constrained  in  1''14  to  make 
a  similar  attempt  on  Tibet.  In  the  absence  of  any  means 
of  enforcement,  therefore,  it  is  clear  that  any  pr 
or  measure  made  in  behalf  of  the  Open  Door  policy  must 
receive  the  cooperation  and  support  of  the  Powers  in- 
ted.    Otherwise  it  has  little  chance  to  succeed.    The 

neutralization  plan  Of  Secretary  Knox,  formulated  evi- 
dently with  statesmanlike  purpose,  was  not  materialized 

through  the  opposition  of   Russia  and  Japan.     On  the 


174    POLICIES  OF  GREAT  POWERS  IX  CHINA 

other  hand,  the  currency  :m<l  industrial  development  loan 
ully  concluded,  although  the  loan  has  not 
vet  been  floated,  because  of  the  disinterested  sharinj 

the  part   of    the   United   States   with    the   other    Powers 
and  their  voluntary  cooperati' 

The  successful  application  of  the  Open  Door  policy, 
therefore,  depends  upon  the  fulfillment  of  these  three 
essential  conditions:  the  cooperation  of  China,  the  direct 
participation  of  the  United  States,  and  the  cooperation 
of  the  Powers  interested.  In  view  of  the  present  >tate  of 
world  politics,  the  lack  of  any  of  these  conditions  will 
render  the  application  of  the  Open  Door  doctrine  in 
China  unsatisfactory,  if  not  entirely  unsuccessful. 

In  conclusion,  reference  must  be  made  to  the  New  In- 
ternational Hanking  Consortium.  This  is  a  living  and 
physical  personification  of  the  Open  Door  doctrine.  It 
embodies  the  leading  principles  of  the  policy.  It  aims, 
by  an  international  pooling  of  interests,  to  maintain  the 
equal  opportunity  of  trade.  It  aims,  moreover,  to  pre- 
serve,  as  Ear  as  feasible,  the  territorial  sovereignty  and 
administrative  integrity  of  China.  It  proposes  to  inter- 
nationalize the  Chinese  railways  that  are  to  be  built, 
which,  as  we  have  seen,  has  become  a  new  principle  or 

.1  corollary  of  the  leading  principles  of  the  Open 
Door  doctrine.  Regarding  the  three  conditions  necessary 
for  the  successful  application  of  the  Open  Door  policy, 
it  already  enjoys  two — the  direct  participation  of  the 
United  States  and  the  cooperation  of  the  Powers  in- 
terested.    Its  remaining  need  is  the  cooperation  of  China 

If,  which,  under  favorable  conditions,  can  be  ob- 
tained by  proper  approach  and  fail  dealing.     The  success, 

Fore,  of  the  new  Consortium  spells  the  success  of 
the  <  >pcn    Door  doctrine,   while   the    failure  of   the   new 

Ortium  means  the  failure  of  the  Open  Door  policy.68 


POLICY  OF  UNITED  STATES  IN  CHINA    175 


NOTES  TO  CHAPTER  IX 

1.  Morse,  Internatl.  Rel.  of  the  Chinese  Emp.,  Vol.  3,  p.  350, 
et  seq. ;  U.  S.  For.  Rel.,  1901.  App.,  pp.  So.  121. 

2.  W.  F.  Mannix,  Memoirs  of  Li  Hung  Chang,  p.  280. 

3.  U.  S.  For.  Rel.,  1908,  p.  64,  et  seq. 

4.  U.  S.  For.  ReL,  1912,  p.  88  et  seq.;  MacMurray,  1911/2; 
U.  S.  For.  Rel.,  1913.  p.  1924. 

5.  Putnam  Weale,  The  Fight  for  the  Republic  in  China,  p. 
345. 

6.  John  Hay's  Letter  to  Paul  Dana,  dated  Mar.  16,  1899,  W. 
R.  Thaver,  The  Life  of  John  Hay,  Vol.  2,  p.  241. 

7.  U.  S.  For.  Rel.,  1899,  p.  128  et  seq. 

8.  U.  S.  For.  Rel.,  1899,  p.  132,  Mr.  Hay  to  Mr.  Choate,  Sept. 
6,  1899. 

9.  U.  S.  For.  Rel.,  1899,  pp.  141-142,  Count  Mouravieff  to  Mr. 
Tower,  dated  Dec.  18-30,  1899. 

10.  U.  S.  For.  Rel.,  1899,  p.  142,  John  Hay's  Instructions  to 
Ambassadors  at  the  Capitals  of  the  Powers  Addressed. 

11.  U.  S.  For.   Rel.,  1899,  p.  132. 

12.  U.  S.  For.  Rel.,  1899,  p.  136,  Lord  Salisbury  to  Mr.  Choate, 
Nov.  30,  1899. 

13.  MacMurray,  Treaties  and  Agreements  With  or  Concerning 
China,  1906/2. 

14.  MacMurray,  1913/11,  and  1915/10. 

15.  MacMurrav,  1895/5. 

16.  U.  S.  For.  Rel.,  1899,  pp.  131-133,  Mr.  Hay  to  Mr.  Choate, 
Sept.  6,  1899. 

17.  U.  S.  For.  Rel.,  1902,  p.  26,  Memorandum  Respecting 
Manchuria,  Feb.  1,  1902,  inclosed  in  John  Hay's  Letter  to  Mr. 
McCormick. 

18.  U.  S.  For.  Rel..  1902,  p.  57,  from  the  Original  Russian 
Note  sent  by  Mr.  de  Plancon  to  Prince  Ch'ing,  inclosed  in  Mr. 
Conger's  Letter  to  Mr.   Hay,  May  4,  1903. 

L9.  T.  S.  For.  ReL,  1902,  p.  54,  Mr.  Hay  to  Mr.  Conger, 
Apr.  2'x  1 

20.  MacMurray,  1903/5. 

21.  1.  S  For.  ReL,  1S99,  p.  132,  Mr.  Hay  to  Mr.  Choate, 
Sept  6,  II 

22.  U.  S.  For.  Rel.,  1899,  p.  141,  Mr.  Hay  to  Mr.  Tower, 
Sept.  6,   1 

23.  I      S.   For.   KM.,  1901,  App.,  Affairs  in  China,  p.  12. 

24.  U    s.  For.  ReL,  1901,  App.,  Affairs  in  China,  i>.  32. 

25.  I'.  S.  For.  ReL,  1905,  p.  1.  Circular  Telegram  Respecting 
the  Ten itorii  I  integrity  of  China,  Fan.  13,  1905. 

26.  l'.  S.  For.  ReL,  1910,  pp.  243"  245,  Fan.  6,  1910. 

27.  IT.  S.  For.  ReL,  1901.  App.,  Affairs  in  China,  p.  12. 

For.  Rel..  1901,  App.,  ibid.  p.  32. 
29.    LT.  S.  For.  ReL,  1910,  pp.  203-205,  the  Sec*y  of  State  to 
the  Russian  Ambassador,  Apr.  9,  1908. 


176    POLICIES  OF  GREAT  POWERS  IN  CHINA 

30.  U.   S.    For.    ReL,    1910,   pp.   243-245,   Statement  given   to 

6,  1910. 

31.  Millard,  Democracy  and  the  Eastern  Question,  App.  A, 
p.  361  et  seq. 

32.  I'.  S.  For.  Rel.,  1901.  App.,  Affairs  in  China,  p.  12. 

33.  U.  S.  For.  Rel.,  1913.  p.  170-171.  Statement  Issued  to 
Press  bv  President  Wilson,  March  18,  1913. 

34A.    N.  V.  Times,   \'<>v.  17,  1916.  p.   17. 
34B.     X.  V.  Times.  July  30.  1918.  p.  13. 
35.    Millard,  Our  Eastern  Question,  App.  L,  pp.  452-456. 
.><>.    Hearings  before  the  Comm.  on  For.  Rel.,  U.  S.  Sen..  66th 
Cong..  First  Ses.,  on  Treaty  of  Peace  with  Germany,  pp.  225-226. 

37.  U.  S.  For.  Rel.,  1899,  pp.  129,  132. 

38.  U.  S.  For.  Rel..  1902.  p.  26. 

39.  U.  S.  For.  Rel..  1910,  pp.  234-235,  the  Sec'y  of  State  to 
Ambassador  Reid,  Nov.  6.  1909. 

40.  Thos.  W.  Lamont,  Preliminary  Report  on  the  New  Con- 
sortium for  China,  pp.  5-6. 

41.  Hearings  before  the  Committee  on  For.  Rel.,  op.  cit.,  Sen. 
Document  No.  106,  p.  225. 

42.  Hearings  before  the  Comm.  on  For.  Rel.,  ibid,  p.  224. 

43.  Hearings,  ibid.,  p.  226. 

44.  Vide  infra,  Part  3,  The  Policy  of  Japan  in  China,  chaps,  on 
the  Policy  of  Paramount  Influence,  and  the  Policy  of  an  Asiatic 
Monroe  Doctrine. 

45.  W.  VV.  Willoughby,  Foreign  Rights  and  Interests  in  China, 
p.  263. 

46.  U.  S.  For.  Rel.,  1902,  p.  26. 

47.  W.  VV.  Willoughby,  op.  cit.,  pp.  263-264. 

48.  Art.  10  reads:  "The  members  of  the  League  undertake 
to  respect  and  preserve  as  against  external  aggression  the  ter- 
ritorial integrity  and  existing  political  independence  of  all  mem- 
bers of  the  League.  In  case  of  any  such  aggression  or  in  case 
of  any  threat  or  danger  of  such  aggression,  the  Council  shall 
advise  upon  the  means  by  which  this  obligation  shall  be  filled." 
The  reservation  reads:  "The  United  States  assumes  no  obliga- 
tion to  preserve  the  territorial  integrity  or  political  independence 
of  any  other  country,  or  to  interfere  with  controversies  between 
nations,  whether  members  of  the  League  or  not,  under  the  pro- 
vision of  Art.  10,  or  to  employ  the  military  and  naval  forces  of 
the  United  States  under  any  article  of  the  Treaty  for  any  pur- 
pose, unless  in  any  particular  case  the  Congri  SS,  which  under 
the  Constitution  has  the  sole  power  to  declare  war  or  to  author- 
ize the  employment  of  the  military  or  naval  forces  of  the  United 
States  shall  by  act  or  joint  resolution  so  provide." 

49.  W.  R.  Thayer,  The  Life  of  J. ,1m  Hay.  VoL  2.  p.  369. 

50.  Mention  must,  however,  be  made  of  President  \V.  H.  Taft, 
who,  on  account  of  his  personal  knowledge  of  the  affairs  of  the 
Far  East,  advocated  the  enforcement  of  the  Open  Door  policy 
in  China  with  force,  if  necessary.  In  his  inaugural  address  of 
Mar.  4,   1909,  he  said:   "In  the  international  controversies  that 


POLICY  OF  UNITED  STATES  IN  CHINA    177 

arc  likely  to  arise  in  the  Orient  growing  out  of  the  question  of 
the  Open  Door  and  other  issues,  the  United  States  can  maintain 
her  interest  intact  and  can  secure  respect  for  her  just  demands. 
She  will  not  be  able  to  do  so,  however,  if  it  is  understood  that 
she  never  intends  to  back  up  her  assertion  of  right  and  her 
defense  of  interest  by  anything  but  mere  verbal  protest  and 
diplomatic  notes.  For  these  reasons  the  expenses  of  the  army 
and  navy  and  of  coast  defenses  should  always  be  considered  as 
something  which  our  Government  must  pay  for,  and  they  should 
not  be  cut  off  through  mere  consideration  of  economy." — Con- 
gressional Record,  Vol.  4-1,  Part  1,  61st  Cong.,  p.  3. 

51.  Millard,  Our  Eastern  Question,  p.  357,  The  Annual  Report 
of  the  American  Association  of  China,  on  Dec.  29,  1914. 

52.  U.  S.  For.  Rel.,  1910,  pp.  243-245.  Statement  given  to  Press 
by  the  Department  of  State-,  Jan.  6,  1910. 

53.  N.  V.  Times  July  30,  1918. 

54.  When,  therefore,  the  violation  of  the  Open  Door  doctrine 
was  committed  by  Japan  in  1915,  by  the  presentation  of  the  21 
Demands,  the  United  States  Government,  because  of  the  Great 
War,  did  not  seriously  take  issue  with  the  Japanese  Government, 
but  was  reported  to  have  proposed  to  settle  the  matter  at  the 
close  of  the  Great  War  by  a  general  international  conference, 

obtain  the  cooperation  of  the  Powers  expressly  or 
passively  committed  to  the  Open  Door  doctrine,  which  was 
indispensable  for  its  successful  application.  "No  protest  or  ag- 
gressive action  against  the  Japanese  acts  or  policy  in  China  will 
be  made  by  the  United  States  at  this  time.  The  State  Depart- 
ment is  unwilling  to  begin  a  serious  controversy  in  the  Far 
East  while  Europe  is  seething  with  war  and  while  this  country 
is  involved  in  the  numerous  difficulties  growng  out  of  that 
struggle.  For  this  reason  there  will  be  no  diplomatic  protest 
against  Japanese  aggressions  in  China  until  the  European  War 
has  ended  and  its  international  complications  have  been  resolved. 

"The  United  States  will  content  itself  with  securing  from  the 
Mikado's  Government  a  full  and  dear  statement  of  tin-  intention 
of  the  Japanese  toward  China,  particularly  toward  the  '  ►pen 
Door  policy,  and  of  the  effect  of  the  recent  demands  made  on 
China. 

"With  this  statement  on  the  diplomatic  record,  the  State  De- 
partment will  wait  until  the  end  of  the  war.  Then  it  is  planned 
t<>  take  up  the  question  of  Japanes*  ons  in  China  with  all 

«'i  the  world  Powers  who  are  actually  or  tacitly  committed  to 
the  Open  Door  policy.  State  Department  officials  believe  that  in 
this  way  an  effective  una  in.'  the  Chinese  situation  can 

Ived  withoul  complicating  the  issue."  -Washington  Tost, 
Sept.  17,  1916;  Patrick  Gallagher,  America's  Aims  and  Asia's 
Aspirations,  pp.   199  200. 

55.  It  is  within  reason  I  that,  in  the  Disarmamenl  and 

m    Conference,    the    Open    Door    Doctrine    wdl    !. 
affirmed. 


PART  in 

THE  POLICY  OF  JAPAN  IN  CHINA 

X.     The    Development    of    Japan's    Policy    in 
China. 

XI.  Policy  of  Economic  Exploitation. 

XII.  Policy  of  Territorial  Expansion. 

XIII.  Policy  of  Paramount  Influence. 

XIV.  Policy  of  Political  Control. 

XV.  The  "Asiatic  Monroe  Doctrine." 

XVI.    The  "Twenty-one  Demands"  as  an  Illustra- 
tion of  Japan's  Policies  ix  China. 

XVII.     The  Wisdom  of  Japan's  Policy  in  China. 


X 

THE  DEVELOPMENT  OF  JAPAN'S  POLICY  IN 

CHINA 

The  development  of  Japan's  policy  in  China  turned 
on  three  successive  wars — the  Chino-Japanese  War 
(1894-1895),  The  Russo-Japanese  War  (1904-1905)  and 
the  World  War  (1914-1918).  At  each  of  these  succes- 
sive milestones,  it  has  taken  a  new  turn  and  a  new  de- 
velopment. 

The  first  stage  of  Japan's  policy  was  reached  in  the 
Chino-Japanese  War.  It  was  characterized  by  the  in- 
tense national  desire  to  recover  judicial  and  tariff  au- 
tonomy, and  to  achieve  the  status  of  national  equality. 
Thus  the  policy  of  this  period,  both  internal  and  external, 
was  directed  primarily  to  the  upbuilding  of  a  new  Japan 
which  could  stand  on  the  footing  of  equality  with  the 
Western  Powers.  In  1897,  when  the  goal  of  national 
equality  had  been  reached,  Count  Okuma  said  in  the 
House  of  Representatives:  "The  national  policy,  the  so- 
called  opening  and  development  of  the  country,  or  in 
other  words,  this  principle  of  attaining  an  equal  foot- 
ing with  the  Powers  was.  1  firmly  believe,  the  motive 
that  has  enabled  Japan  to  become  a  nation  advanced  in 
civilization  and  respected  by  the  world."1 

During  this  period,  while  the  primary  concern  of  Japan 
was  her  own  development,  she  was  none  the  less  con- 
cerned with  the  independence  of  Korea,  and  this  because 
the  independence  of  Korea  is  indispensable  to  her  safety. 
Kona  is  so  located  geographically  in  relation  to   fapan 

that  any  attempt  to  invade  the  latter  from  the  mainland 
must  firsl  Conquer  Korea  and  make  that  nation  a  step- 
ping-stone to  Japan's  subjugation.     So,  to  allow  any  for- 

181 


182       THE  POLICY  OF  JAPAN  IN  CHINA 

eign  Power  to  hold  Korea  therefore  was,  as  the  Japanese 
Statesmen  put  it,  to  allow  that  Power  t<>  hold  a  dagger 
at  the  lu-art  of  Japan.  For  measures  of  self-defense, 
therefore  she  must  maintain  the  independence  of  Korea. 

I  folding  such  a  policy,  Japan's  first  ohject  of  attack  was 
naturally  China,  who  claimed  suzerainty  over  Korea.  To 
free  Korea  from  the  control  of  China  was  therefore  one 
of  the  cardinal  principles  of  her  foreign  policy.  As  we 
have  seen,-  as  early  as  1876,  she  had  concluded  a  treaty 
with  Korea  ;  recognizing  the  independence  of  that  state, 
thus  ignoring  the  suzerainty  of  China.  Again,  in  1884, 
to  settle  the  collision  between  the  Chinese  and  the  Japan- 
ese troops  in  Korea,  a  convention  was  arranged  that,  in 
case  of  despatching  troops  to  Korea,  previous  notice  in 
writing  had  to  be  given  each  to  the  other,*  thus  success- 
fully limiting  the  suzerain  rights  of  China,  and  mean- 
while asserting  Japan's  joint  influence  over  Korea.  Fi- 
nally, in  1894,  when,  on  account  of  the  Tonghak  Rebellion, 
the  forces  of  the  two  states  were  brought  face  to  face  in 
Korea,  and  although  the  rebellion  had  already  been  sup- 
pressed by  the  Korean  soldiers,  and  China  had  already 
suggested  a  simultaneous  withdrawal.  Japan  nevertheless 
refused  to  retire.  On  the  contrary  she  insisted  on  coop- 
erating for  the  reformation  of  the  internal  administration 
of  Korea,  to  which  China  refused  to  accede.  Conflict 
could  have  been  avoided,  had  Japan  so  desired,  hut  she 
had  already  determined  on  her  policy  which  was  to  ex- 
tinguish the  suzerain  claims  of  China,  achieve  the  in- 
dependence of  Korea,  attain  a  footing  of  national  equality 
with  a  defeated  China.  Thus  resolved,  and  the  incident  of 
Kowshing  having  offered  the  pretext.'  she  forced  the 
war. 

Having  demonstrated  her  national  prowess,  she  made 
good  use  of  her  victories  to  consolidate  her  own  position 
of  national  equality.  By  the  treaty  of  Shimonoseki,  apart 
from  the  recognition  of  Korean  independence,  the  cession 


JAPAN'S  POLICY  IN  CHINA  183 

of  the  Pescadores,  Formosa  and  Liaotting,  and  the  in- 
demnity of  200,000,000  Kuping  tads,  she  obtained  the 
abrogation  of  all  previous  treaties  and  the  conclusion  of 
new  ones  to  be  based  on  "the  treaties,  conventions  and 
regulations  now  subsisting  between  China  and  European 
powers,"  °  thereby  placing  herself  on  a  par  with  the 
Western  Powers  in  relation  to  China.  Subsequently,  in 
pursuance  of  the  provision,  she  concluded  the  Treaty  of 
Commerce,  signed  at  Peking,  July  21,  1896.  by  which  she 
secured  extraterritorial  jurisdiction1  and  the  most  fav- 
ored nation  treatment.8  Meanwhile,  vis-a-vis  the  West- 
ern Powers,  she  concluded  one  treaty  after  the  other,  re- 
covering her  judicial  and  tariff  autonomy,  until  June  30, 
1899,  when  "the  operation  of  all  the  old  treaties  came 
simultaneously  to  an  end  and  for  the  first  time  in  his- 
tory, large,  rich  and  intelligent  European  communities 
became  subject  to  the  unfettered  jurisdiction  of  an 
Oriental  Non-Christian  Power."9 

Although  the  goal  of  national  equality  had  been 
reached,  a  new  menace,  more  threatening  than  Chinese 
influence  in  Korea,  arose  upon  the  horizon  of  the  Japan- 
ese mind,  and  dominated  the  second  stage  of  the  develop- 
ment of  Japan's  policy.  This  new  menace  was  the  Rus- 
sian advance  in  Manchuria.  In  concert  with  France  and 
Germany,  Russia  interposed  the  tripartite  intervention 
against  Japan's  possession  of  Liaotung,  which  compelled 

her  tn  disgorge  tlie  territory   for  an  additional  indemnity 

of  30,000,000  Kuping  taels.10  This  act  of  intervention, 
initiated  by  Russia,11  so  incensed  Japan  that  thence- 
forth, she  made  the  grim  resolve  to  face  the  new 
menace. 

"It  became  to  her  as  dear  as  daylight  that  tlie  new 
position  she  had  acquired  in  the  Orient  by  her  victory 

ov«r  (  liina  could  be  maintained,  and  even  her  independ- 
ence must   be  guarded,  only  by  an  armament   powerful 


184       THE  POLICY  OF  JAPAN  IN  CHINA 

enough  to  give  her  a  voice  among  the  first  class  Powers 
of  the  world.  If  she  could  not  retire  into  herself,  and 
finally  cease  to  exist,  she  must  compete  with  the  greatest 
nations,  not  only  in  the  arts  of  peace,  but  also  in  those 
of  war.  Moreover,  a  far  vaster  conflict  than  she  had 
over  known  in  her  history,  excepting  the  Mongol  invasion 
of  the  thirteenth  century,  was  seen  to  be  awaiting  her 
.  .  .  .  The  only  course  to  save  her  seemed  to  be,  now 
as  at  any  other  recent  crisis  of  her  life,  to  go  forward 
and  become  equal  to  the  new  expanding  situation."  u 

Actuated  by  this  high  resolve,  she  bent  all  her  energy 
on  the  day  when  she  would  come  to  grapple  with  the 
new  menace. 

Working  day  and  night  in  preparation  for  the  coming 
crisis,  Japan  abandoned  her  old  hostility  toward  China 
and  espoused  the  Open  Door  policy.  Responding  readily 
to  Secretary  Hay's  circular  note  of  1899,  she  gave  her 
"assent  to  so  just  and  fair  a  proposal  of  the  United 
States,  provided  that  all  the  other  Powers  concerned 
shall  accept  the  same."  l;;  During  the  Boxer  Uprising,  her 
soldiers  exemplified  both  courage  and  orderly  conduct, 
and  in  the  negotiation  for  settlement,  she  sided,  mainly, 
with  Great  Britain  and  the  United  State-."  As  against 
the  Russian  Convention  in  regard  to  Manchuria,  and 
the  Seven  Articles,  joining  Great  Britain  and  the  I "nited 
States,  she  entered  repeated  protests.111  During  the  nego- 
tiations attending  the  conclusion  or  the  Anglo-Japanese 
Alliance  Count  Hayashi,  in  r<  isponse  to  Lord  Lansdowne's 
inquiry  as  to  Japan's  policy  in  China,  replied:  "As  I 
have  before  stated,  we  entirely  agreed  with  the  British 
policy  in  Eastern  countries.  '1  hat  is  to  say.  we  wish  to 
maintain  the  territorial  integrity  of  China  and  the  princi- 
ple of  equal  opportunity."  M  And  when  the  Alliano 
concluded,  the  preamble  read  : 

"The  governments  of  Great  Britain  and  Japan,  actuated 
solely  by  a  desire  to  maintain  the  status  quo  and  general 


JAPAN'S  POLICY  IN  CHINA  185 

peace  in  the  extreme  East,  being  moreover  specially  in- 
terested in  maintaining  the  independence  and  territorial 
integrity  of  the  Empire  of  China  and  the  Empire  of 
Korea,  and  in  securing  equal  opportunities  in  these  coun- 
tries for  the  commerce  and  industry  of  all  nations,  hereby 
agree,"  etc.17 

Finally,  in  the  negotiation  with  Russia  just  prior  to 
the  declaration  of  war,  Japan  repeatedly  insisted  on  the 
integrity  of  China  in  Manchuria,  the  observance  of  which 
Russia  repeatedly  refused  to  pledge.  Thus,  during  the 
period,  when  she  was  feverishly  preparing  for  her  clash 
with  Russia,  Japan  was  a  consistent  upholder  of  the  Open 
Door  doctrine  in  China. 

After  the  victories  she  achieved  in  the  Russo-Japanese 
War,  the  policy  of  Japan  took  a  radical  turn  in  China. 
Instead  of  setting  her  face  against  Russia,  she  set  it  in 
the  direction  of  the  mainland  of  Asia.  In  other  words, 
she  launched  her  policy  of  continental  expansion.  When 
Komura  left  for  Portsmouth,  he  had  already  formulated 
the  plan  of  a  Greater  Japan. 

"On  the  Asian  continent  he  would  create  a  Greater 
Japan.  .  .  .  Manchuria  and  the  road  to  Europe  must  be 
won.  In  the  Portsmouth  deliberations,  August  10  to 
September  5,  1905,  Russia  agreed  to  share  with  Japan  all 
her  special  rights  in  the  Chinese  Empire  and,  accordingly 
turned  over  to  her  the  texts  of  all  her  previous  treaties 
with  China  .  .  .  what  was  wanted  was  that  which  could 
guarantee  Japan's  future — a  foothold  on  the  Continent, 
control  of  high  seas  to  Europe,  preponderance  in  the  de- 
velopment of  Manchuria,  the  .subordination  of  China,  and 
the  friendship  of  Russia  .  .  .  all  their  ends  for  which  the 
war  had  been  fought — had  been  settled  in  Komura's 
mind  before  leaving  [apan  and  were  won  at  Ports- 
mouth." 1S 

Upon  bis  transfer  from  London  to  the  Japanese  For- 
eign Office,  Hayashi,  like  Komura,  laid  down  the  policy, 


186       THE  POLICY  OF  JAPAN  IN  CHINA 

that  was  to  be  carried  out  by  all  diplomatic  agents  of 
Japan.    This  policy  was  a  peaceful  penetration  of  China 

by  means  of  commercial  and  economic  expansion,  hacked 
by  diplomatic  pressure  and  armed  force,  with  a  view  to 
eventual  political  control.  Industrial  expansion  was  to 
be  assisted  by  political  expansion,  and  vice  versa.  With- 
out commercial  expansion,  political  control  would  be  hol- 
low ;  without  political  control  commercial  expansion  would 
be  unsafe  and  unstable.10 

To  execute  this  policy  of  continental  expansion,  Japan 
had  to  make  certain  strategic  moves.  The  first  was  the 
subjection  and  annexation  of  Korea.  Just  as  any  power 
attempting  to  invade  Japan  from  the  direction  of  the 
mainland  must  first  conquer  Korea,  so  likewise  Japan 
must  first  subjugate  and  control  Korea  and  make  that 
state  a  first  step  toward  the  domination  of  Eastern  Asia. 
After  her  declaration  of  war  on  Russia,  she  established 
her  protectorate  over  Korea,*0  appointed  advisers  to  con- 
trol finance  and  foreign  relations,-1  and  took  over  the 
communication  systems — post,  telephone,  telegraph — 
amalgamating  them  with  her  own.-1'  Immediately  upon 
the  conclusion  of  the  war,  she  took  over  the  foreign  re- 
lations of  Korea,  as  the  first  step  towards  final  annexa- 
tion.23 In  the  Anglo-Japanese  Alliance,  dated  August 
12,  1905,  she  obtained  the  recognition  of  her  paramountcy 
over  Korea  and  of  her  right  "to  take  such  measure  of 
guidance,  control  and  protection  in  Korea  as  she  may 
deem  proper  and  necessary"  -'  (Art.  .^).  In  his  letter 
to  Sir  C.  Hardinge,  the  British  Ambassador  to  Russia,25 
Lord  Lansdowne  said:  "It  has,  however,  become  evi- 
dent that  Korea,  owing  to  its  close  proximity  to  the 
Japanese  Empire  and  its  inability  to  stand  alone,  must 
fall  under  the  control  and  tutelage  of  Japan."  In  1907 
the  administration  of  Korea  was  placed  under  the  con- 
trol of  the  Japanese  Resident-General.*"  In  1910,  the 
annexation  pf  Korea  was  consummated.-7  Thus,  Japan 
completed  her  first  step  in  continental  expansion. 


JAPAN'S  POLICY  IN  CHINA  187 

Having  made  Korea  a  stepping-stone,  she  was  ready 
to  pursue  her  policy  in  China.  She  wanted  to  exploit 
the  latter's  natural  resources.  She  desired  to  dominate, 
if  not  actually  to  annex.  South  Manchuria  and  Eastern 
Inner  Mongolia;  she  was  anxious  to  displace  foreign  in- 
fluence in  China  by  her  own  paramount  influence ;  she 
yearned  to  establish  an  Asiatic  Monroe  Doctrine,  and, 
above  all,  designed  to  obtain  the  control  of  the  Peking 
Government.  All  these  things  she  aimed  to  do,  but  she 
found  there  was  one  great  obstacle  in  her  way,  and  that 
was  the  presence  in  China  of  the  European  Powers.  Be- 
cause of  the  balance  of  power,  she  was  not  able  to  move 
in  the  direction  she  wished,  without  arousing  the  jealousy 
and  opposition  of  the  other  Powers.  She  had  to  wait 
for  the  opportunity. 

But  the  Great  War  came  in  1914,  and  the  chief  atten- 
tion of  the  rival  Powers  was  transferred  to  the  battle- 
fields of  Europe.  By  Japan,  this  was  regarded  as  an 
opportunity  sent  by  Providence.  A  Black  Dragon  Society 
appeared  and  urged  the  government  to  solve  the  Chinese 
question  at  the  opportune  moment,28  by  the  formation  of 
a  defensive  alliance  with  China,  based  on  a  set  of  terms, 
which  well  reflected  those  of  the  subsequent  Twenty- 
one  Demands : 

"Now  is  the  most  opportune  moment  for  Japan  to 
quickly  solve  the  Chinese  question.  Such  an  opportunity 
will  not  occur  for  hundreds  of  years  to  come.  Not  only  is 
it  Japan's  divine  duty  to  act  now,  but  present  conditions 
in  China  favor  the  execution  of  such  a  plan.  We  should 
by  all  means  decide  and  act  at  once.  If  our  authorities 
do  not  avail  themselves  of  this  rare  opportunity,  great 
difficulties  will  surely  be  encountered,  in  future  in  the 
settlement  of  this  Chinese  question.  Japan  will  be  iso- 
lated from  the  European  Powers  after  the  war.  and  will 
be  regarded  by  them  with  envy  and  jealousy  just  as  Ger- 
many is  now  regarded.  Is  it  not  then  a  vital  nee. 
for  Japan  to  solve  at  this  verv  moment  the  Chinese  ques- 
tion?"29 


188       THE  POLICY  OF  JAPAN  IN  CHINA 

Tapan  struck  while  the  iron  was  hot.  She  ousted  Ger- 
many from  Shantung  and  made  herself  that  nation's  suc- 
cessor, thus  extending  her  influence  over  the  Yellow  River 
Basin.  She  then  lowered  the  mask  she  had  been  wearing 
because  of  the  presence  of  the  other  Powers  in  the  Orient, 
and  revealed  her  real  intentions  regarding  China.  She 
nted  the  Twenty-one  Demands  which  form  the  best 
single  document  expo  an's  policy  in  China  (this 

subject  will  be  discussed  in  a  subsequent  chaj  I  lav- 

ing failed  to  force  Group  Five  on  the  Chinese  Govern- 
ment, she  changed  her  tactics  and  resorted  to  indirect 
attack,  through  indiscriminate  loans  and  the  manipulation 
of  the  Pro-Japanese  Anfu  Club  then  in  control  of  the 
Peking  Government.  This,  however,  also  failed,  because 
of  the  termination  of  the  World  War  and  the  consequent 
return  of  the  Powers,  and  especially  because  of  the  vic- 
torious arms  of  General  Wu  Pai-fu  who  destroyed  the 
power  of  the  Anfu  Club  and  saved  the  Peking  Govern- 
ment from  its  deadly  grip.  When,  therefore,  llara  came 
to  office  in  1918,  he  was  compelled  once  more  to  put  on 
the  mask  which  Okuma  had  discarded,  and  resumed  the 
policy  toward  the  Powers  of   international  cooperation. 

During  this  period,  Japan  supplemented  her  policy  of 
advance  in  China  by  various  agreements  with  the  Powers 

so  as  to  avoid  unnecessary  conflicts.  This  was  one  of  the 
policies  laid  down  by  Hayashi — the  policy  of  simultaneous 
political  and  economic  ion,   facilitated  by  interna- 

tional agreements.31  Discarding  her  old  hostility,  there- 
fore, and  adopting  a  policy  of  friendliness  toward  Russia, 
she  concluded  the  agreemenl  of  1907,  pledging  to  main- 
tain their  respective  status  quo.**  As  a  result  of  this 
understanding,  she  failed  to  protest  against  the  Russian 
establishment  of  the  municipal  administration  in  Har- 
bin in  1907,  which  right  she  had  denied  Russia  before 
the  Russo-Japanese  War.  Reacting  against  the  intrusion 
of  the  Knox  neutralization  plan,  she  entered  the  second 


JAPAN'S  POLICY  IN  CHINA  189 

agreement  with  Russia,  on  July  4.  1910,  engaging  to  take 
common  measure  against  outside  interference  with  their 
interests  within  their  respective  spheres  of  influence. " 
During  the  War.  she  entered  into  a  secret  treaty  of  alli- 
ance with  Russia  in  1916,  mutually  promising  armed  as- 
sistance in  case  of  war/'  Likewise  in  1907,  she  arranged 
an  agreement  with  France,88  Russia's  ally  in  the  Dual  Al- 
liance, for  mutual  support  in  their  respective  spheres  in 
Asia,  therein-  incidentally  facilitating  the  flotation  of  her 
loans  in  Paris  and  promoting  her  own  trade  in  Annam. 

Meanwhile,  her  relations  with  the  United  States  be- 
came more  and  more  unsatisfactory  and,  at  times,  even 
strained.  In  launching  her  policy  in  China,  she  realized 
that  the  power  that  would  most  likely  stand  in  her  way 
of  achievement  was  the  United  States,  who  with  her 
espousal  of  the  Open  Door  doctrine,  stood  as  a  guardian 
over  China.  She  took  offense  at  the  terms  of  the  Ports- 
mouth Treaty,  and,  more  so,  at  the  Anti-Alien  Land  Law 
and  the  California  School  Incident.  In  concert  with 
Russia,  she  rejected  the  neutralization  plan  of  Secretary 
Knox.  During  the  World  War,  resenting  Wilson's 
friendly  note  of  1917  to  China  which  it  was  claimed, 
ignored  the  special  position  of  Japan  in  China,  she  des- 
patched the  Eshii  .Mission  and  obtained  recognition  from 
the  United  States  Government  of  her  special  interests  in 
China. 

Likewise,  her  relation  with  Great  Britain  became  less 
cordial.  The  Anglo-Japanese  Alliance  of  1911  exempted 
the  United  States  from  the  force  of  the  Alliance — the 
very  nation  against  whom  she  would  have  the  Treaty 
direct  its  application M  (Article  4).  Article  five  of  Gn  up 
Five  of  the  Twenty-one  Demands  asked  for  rail- 
way concessions  in  the  Yangtze  Valley  which  con- 
flicted with  British  int<  Article  5,  Group  5).81    The 

general   aggre   jive  nature   of   the  Twenty-one    Demands, 

especially  Group  I  ughl  forth  a  storm  of  pi 

in  the  British  pn      .        A    a  reaction,  especially  after  the 


190        THE  POLICY  OF  JAPAN  IX  CHINA 

failure  <>f  Group  Five,  the  Japanese  press  conducted  an 
anti-British  campaign"  and  the  Japanese  entered  mean- 
while, in  1916,  into  a  secret  alliance  with  Russia.  Above 
all,  the  Japanese  ambition  of  winning  trade  predominance 

in  China  conflicted  irrcconciliahly  with  the  British  | 

of  maintaining  commercial  supremacy. 

Summing  up  the  development  of  Japan's  policy  in 
China,  it  may  be  said  that,  during  the  first  stage  culmi- 
nating in  the  Chino- Japanese  War,  this  policy  was  di- 
rected primarily  to  the  achievement  of  national  equality 
and  the  independence  of  Korea;  that  during  the  second 
period,  ending  with  the  Russo-Japanese  War,  it 
tered  on  the  coming  struggle  with  Russia  and  the  main- 
tenance of  the  Open  Door  Doctrine  in  China;  hut  that, 
with  her  victory  over  Russia,  came  a  sharp  change  in  her 
policy,  and  she  launched  upon  a  career  of  continental  ex- 
pansion, treading  down  a  martyred  Korea  and  menacing 
the  integrity  of  China. 


NOTES  TO  CHAPTER  X 

1.  Alfred  Stead,  Japan  by  the  Japanese,  p.  219. 

2.  Vide  supra,  chapter  on  the  Loss  of  Dependencies. 

3.  State  Papers,  Vol,  67.  pp.  530-533. 

4.  State  Papers,  Vol  76,  pp.  297-298. 

5.  Vide  supra,  chapter  on  the  Loss  of  Dependencies. 

6.  Hertslet,  Vol.  1,  p.  364.  Art.  6. 

7.  Hertslet,  Vol.  1,  p.  379  et  seq..  Arts.  20,  21,  22. 

8.  Hertslet,  VoL  1,  p.  38L  Art.  25. 

9.  J.   11.  Longford,  The  Evolution  of  Japan,  p.  81. 

10.  Vide    supra,    chapter    on    the    [nternational    Struggle    for 
Concessions. 

11.  Counl    Witte,    Mv     Dealings    with    the    Li    Hung    Chang, 
World's  Work,  Jan..  1921,  p.  300  el 

12.  K.  A-akaua,  The  Russo-Japanese  Conflict,  p.  79-80. 

13.  I'.  S.   Foreign   Relations,   1899,  p.   139,   Viscount   Aoki  to 
Mr.  Buck,  Dec.  26,  1899. 

14.  Morse,  The  [nternational   Relation  of  the  Chinese  Empire, 
Vol.  3,  Chapters  Hi,  11.  12. 

15.  Vide    supra,    chapter    on    the    International    Struggle    for 
Concessions. 


JAPAN'S  POLICY  IN  CHINA  191 

16.  A.  M.  Pooley,  The  Secret  Memoirs  of  Tadasu  Hayashi, 
p.  134. 

17.  State  Papers.  Vol.  r'5.  pp.  83-84. 

18.  Dr.  W.  E.  Griffith's  statement  in  New  York  Sun,  May  30, 
1915,  quoted  in  Bash  lord,  China  an  Interpretation,  p.  387  et  seq. 

19.  Pooley,  Japan's  Foreign  Policy,  p.  47  et  seq. 

20.  State  Papers,  Vol.  98,  p.  842,  Protocol  of  Seoul,  February 
23,  1904. 

21.  State  Papers,  Vol.  98,  p.  843,  Agreement  of  Aug.  22,  1904. 

22.  State  Papers,  Vol.  98,  pp.  1137-1139,  Agreement  of  April  1, 
1905. 

23.  State  Papers,  Vol.  98,  pp.  1139-1140. 

24.  State  Pap  98,  pp.  136-138. 

25.  Millard,  Our   Eastern  Question,  Appendix   L,   p.  452,  the 
Marquess  of   Lansdowne  to  Sir  C.  Hardinge,  Sept.  6,  1905. 

26.  State  Papers,  Vol.  101,  p.  280,  Agreement  of  July  24,  1907. 

27.  State  Papers,  Vol.  103,  p.  992,  Treaty  of  Annexation,  Aug. 
22,  1910. 

28.  Putnam  Weale,  The  Fight  for  the  Republic  in  China,  p. 
125  et  seq. 

29.  Weale,  ibid.,  p.   128,  Memorandum  of  the  Black  Dragon 
Society. 

30.  See  chapter  on  The  Twenty-one  Demands  as  an  Illustra- 
tion of  Japan's  Policy  in  China. 

31.  Pooley,  Japan's  Foreign  Policy,  p.  47. 

32.  MacMurray,  1907/11. 

33.  MacMurray,  1910/1. 

34.  MacMurray,  1916/9. 

35.  MacMurray,  1907/7;  Millard,  Our  Eastern  Question,  App. 
M,  pp.  457-458. 

36.  State  Papers,  Vol.  104,  p.  174;  Millard,  Our  Eastern  Ques- 
tion, p.  456. 

37.  The    Sino-Japanese    Negotiations,   Chinese    Official    State- 
ment, 1915,  p.  22. 

38.  Millard,  Our  Eastern  Question,  p.  239  et  seq. 

39.  Ibid.,  p.  247  et  seq. 


XI 
THE  POLICY  OF  ECONOMIC  EXPLOITATION 

The  present  policy  of  Japan  toward  China  has  five 
clearly  defined  objectives  in  view.  They  arc-:  Economic 
Exploitation,  Territorial  Kxpansion,  Paramount  Influ- 
ence, Political  Control  and  the  adoption  of  an  Asiatic 
Monroe  Doctrine. 

Moreover,  this  policy  turns  on  two  fundamental  prob- 
lem-:  The  first  is  that  of  Japan  herself,  arising  out  of 
her  growing  population  and  the  limitations  of  territory 
and  natural  resources  of  the  islands.  This  results  in 
the  adoption  of  the  policy  of  territorial  expansion,  and 
the  policy  of  economic  exploitation.  The  other  problem 
is  that  of  China  arising  out  of  the  international  struggle 
for  concessions  and  the  latter's  apparent  inability  to 
resist  Western  aggression.  This  predominance  of  West- 
ern influence  endangers  the  safety  of  Japan.  The  second 
problem  leads  to  the  adoption  of  a  policy  of  paramount 
influence,  political  control  and  an  Asiatic  Monroe  Doc- 
trine. 

As  already  stated,  the  policy  of  economic  exploitation  is 
one  of  two  alternative  ways  of  meeting  the  population 
problem.  As  population  increases,  territory  must  be  ex- 
panded, and  the  art  of  living  raised  :  otherwise  the  stand- 
ard of  living  will  be  lowered.  Excluding  consideration 
of  allowing  the  standard  of  living  to  deteriorate,  increas- 
ing population  must  be  met  either  by  territorial  expan- 
sion and  economic  exploitation  abroad,  or  industrial  de- 
velopment at  home,  or  by  both.  Japan  chooses  to  solve 
tin-  problem  by  both  mean-. 

The  population  in  Japan  proper  is  57,070,936  *  (on 
December  31,  1918),  and  the  land  area  of  Japan  proper 

192 


POLICY  OF  ECONOMIC  EXPLOITATION     193 

amounts  only  to  148,756  square  miles.2  Dividing  the 
land  area  by  the  population,  the  density  of  population  per 
square  mile  is  384.  In  comparison  with  this  density  in 
other  nations,  Japan  ranks  next  only  to  Belgium  with 
659.4  and  Holland  with  474.3,  and  rivals  Great  Britain 
with  370.8.3  Adding  to  this  density,  the  annual  net  in- 
crease is  about  700,000,  or  12.75  per  thousand.4  At  this 
rate,  the  present  population  will  be  doubled  in  about 
half  a  century. 

Closely  associated  with  the  problem  of  increasing  popu- 
lation, and  in  fact  constituting  an  integral  part  of  the 
same  problem,  is  the  question  of  food  supply.  It  has 
estimated  that  in  Japan  the  per  capita  consumption 
of  rice  in  a  year  is  one  Koku  (  5.11()02  bushels  U.  S.  A. ).' 
Calculating  on  this  basis,  and  Japan's  population  num- 
bering 57,070,936,  the  consumption  in  1918  was  therefore 
reckoned  at  approximately  57,070,936  Koku.  "Against 
this,  the  total  yield  of  rice  in  a  normal  year  is  52,000,000," 
or  5,070,936  less  than  the  need."  Balancing  yearly  the 
export  of  from  600,000  to  700,000  Koku  for  the  400,000 
Japanese  residing  abroad  with  the  import  of  1,500,000 
Koku  from  Korea  and  Formosa  and  a  little  over  1,000,- 
000  from  Saigon,  the  supply  is  still  short  by  about  three 
or  four  million  Koku,  which  means  that  three  or  four 
million  mouths  would  be  left  unfed,  unless  the  requisite 
supply  of  rice  could  be  procured  elsewhere.7 

Confronted  with  the  intense  pressure  of  population 
against  food  supply,  Japan  is  driven  to  become  an  indus- 
trial and  commercial  nation.  Just  as  Great  Britain,  Bel- 
gium and  Holland — all  with  growing  populations  and 
comparatively  small  anas  -nut  their  population  prob- 
lems through  the  development  of  industry  and  commerce, 
so  likewise  Japan  bends  all  her  energy  toward  a  similar 

irse  of  development 

In  her  attempt  to  do  SO,  however,  she  finds  herself 
detieient  in  coking  coal,  iron  and  steel— the  essentials  of 
modern  industry.     She  wa     able  t"  produce  in  1918.  28,- 


194       THE  POLICY  OF  JAPAN  IN  CHINA 

00  m.  tons  of  coal,8  but  she  was  not  able  to  secure 
sufficient  coking  coal,  indispensable  to  the  steel  industry.' 
In  accordance  with  the  estimates  of  the  Japanese  Eco- 
nomic Investigation  Commission,  created  during  the 
Okuma  Ministry,  the  demand  for  pig  iron,  while  not  ex- 

ng  the  supply  in  1918,  will  be  743.000  tons  for  1928, 
and  the  production  of  the  same  in  Japan  proper,  in  1921 
and  thereafter,  will  be  only  611,500  tons,  thus  giving  rise 
to  a  shortage  which  must  he  fdled  by  the  production  in 
Korea.  Manchuria  and  China;  l0  and  the  demand  for  steel 
in  1918  was  1,113,000  tons,  and  the  output  in  Japan 
proper  only  765,000  tons,  and  in  1928  the  demand  will  be 
2,112,000  and  the  yield  in  1921  and  thereafter  only  1,- 
090,000  tons,11  thus  giving  rise  to  a  shortage  of  steel  in 
1918  at  348,000  tons  and  in  1928  at  approximately  1,022,- 
000  tons. 

Before  the  World  War,  Japan  relied  upon  Belgium  and 
Great  Britain  for  her  supply  of  steel.  After  the  outbreak 
of  the  war,  she  turned  to  the  United  States.  But  when, 
in  July,  1917,  the  United  States  put  an  embargo  on  steel, 
Japan's  supply  was  cut  off,  and  her  ship-building  indus- 
tries and  iron- works  almost  came  to  a  complete  halt. 
"Never  before  did  Japan  realize  so  keenly  as  on  that 
occasion  the  precarious  nature  of  her  industrial  struc- 
ture, depending  upon  foreign  countries  for  the  supply  of 
steel."  12 

Thus  handicapped  by  nature,  and  yet  at  the  same  time 
driven  by  circumstances  to  become  an  industrial  and  com- 
mercial nation,  Japan  devoted  attention  to  finding  a  field 
where  she  might  obtain  the  necessary  elements  for  the 
stability  of  her  economic  structure.  Surveying  the  regions 
of  the  world,  she  finds  China,  her  next-door  neighbor, 
the  logical  and  natural  field  for  commercial  expansion. 
There  the  teeming  millions  offer  a  market  for  Japanese 
manufactured  products.  There  unbounded  natural  re- 
sources, especially  coal,  iron  and  steel,  furnish  the  neces- 


POLICY  OF  ECONOMIC  EXPLOITATION     195 

sary  sinews  for  Japanese  industries.  There  the  compara- 
tive shortness  of  distance,  the  affinity  of  language  and 
race,  and  the  potential  increase  of  Chinese  prosperity — 
all  indicate  that  nature  has  provided  a  special  field  of 
economic  activity  for  the  Japanese.  Conceiving  this  to 
be  her  destiny,  she  sets  her  face  like  a  flint  toward  China 
with  the  policy  of  economic  exploitation. 

The  first  region  in  China  to  be  exploited  is  South 
Manchuria.  By  virtue  of  the  Treaty  of  Portsmouth, 
she  obtained  from  Russia  transfer  of  the  lease  of  Port 
Arthur  and  Talien-Wan  and  the  cession  of  the  Chinese 
Eastern  Railway  from  Changchun  to  Port  Arthur,13  with 
the  adjoining  mines.  Possessed  of  these  railway  and 
mining  interests,  the  Japanese  Government  organized  the 
South  Manchuria  Railway  Company.  The  capital  is  200,- 
000,000  Yen,  one-half  held  by  the  Japanese  Government, 
represented  by  the  Manchurian  railway  and  accessories 
and  the  coal  mines  at  Fushan  and  Yentai,  the  other  half 
offered  to  private  investors,  the  Japanese  Government 
guaranteeing  a  profit  of  six  percent  on  the  paid-up  capi- 
tal for  fifteen  years.14  Actually,  however,  the  govern- 
ment owns  four-fifths  of  the  paid-up  capital  and  appoints 
the  president,  vice-president  and  directors.15  It  can  there- 
fore be  said  that  the  South  Manchuria  Railway  Company 
is  merely  a  name,  and  that  the  Japanese  Government  is 
the  real  factor  exploiting  the  resources  of  South  Man- 
churia. 

The  company  runs  its  main  line  from  Dairen  to  Chang- 
chun, the  Tort  Arthur  Branch  Line,  the  Yingkow,  Fustian 
and  Yentai  Branches,  and  the  Mukden-Antung  Line,  mak- 
''2.7  miles  in  all.16  Besides  the  railways,  it  also  main- 
tains a  regular  shipping  service  between  Shanghai  and 
Dairen,  and  also  a  South  China  coastwise  service.  It 
ebuilt  the  second  quay,  and  constructed  breakwaters, 
and  a  third  quay,  in  the  harbor  of  Dairen,  all  of  which 
have  been  completed.    Further,  it  operates  electric  power 


196       THE  POLICY  OF  JAPAN  IN  CHINA 

stations  at  Dairen,  Mukden,  Changchun,  Antung,  Fushan 
and  Yentai,  and  electric  tramways  and  gas  industries  at 
Dairen  and  Fushan.17  In  addition,  the  company  manages 
its  own  hotels — all  hearing  the  name  of  the  "Yamato 
Hotel" — at  Dairen,  Hoshigaura  (suburbs  of  Dairen  I, 
Port  Arthur,  Mukden  and  Changchun.  Besides  these  in 
the  railway  zone,  it  maintains,  according  to  the  report  at 
the  end  of  March,  1918, 18  eleven  hospitals,  twenty  pri- 
mary schools,  eleven  Chinese  common  schools,  thirty-two 
business  schools,  ten  girls'  practical  schools,  one  medical 
school  (at  Mukden),  a  technical  school,  and  a  teachers' 
training  institute  at  Dairen,  one  polytechnic  laboratory, 
two  agricultural  experimental  stations,  thirteen  farms  and 
seventeen  water  works.1' 

Furthermore,  the  company  is  engaged  in  the  operation 
of  the  mines,  which  form  one  of  its  most  important  under- 
takings. The  Fushan  Colliery,  situated  about  twenty- 
two  miles  east  of  Mukden,  contains  a  deposit  of  an 
average  of  130  feet  in  thickness,  "runs  for  about  twelve 
miles  parallel  to  the  River  Hun,"  and  yields  a  total  out- 
put of  6,000  tons  a  day,  (or  2,275,905  tons  in  1918). 
"The  quality,  too,  is  excellent,  being  of  strong  caloric 
power  and  containing  very  little  sulphur."20  The  Yen- 
tai Coal  Field,  northeast  of  Liao-yang,  vields  an  output 
of  247  tons  daily  or  (113,679  tons  in  1918). "  "The 
coal  is  soft  and  pulverizable  and  emits  but  little  smoke."  22 
Among  the  new  undertakings,  the  iron  foundry  at  An- 
sbantien  yields  an  initial  output  of  150,000  tons  which 
will  be  ultimately  increased  to  1,000,000,  "the  ore  at  \n- 
shantien  being  almost  inexhaustible."  ■  The  glass  works, 
the  porcelain  and  the  lire-proof  tile  factory  have  begun 
to  send  forth  their  new  products.-41-5 

Besides  the  activities  of  the  South  Manchuria  Rail- 
way Company,  the  Japanese  Government  has  other  rail- 
way interests  in  South  Manchuria  and  even  in  Eastern 
Inner  Mongolia.  In  accordance  with  the  treaty  of  April, 
1917,  she  completed  the  construction  of  the  K inn-Chang- 


POLICY  OF  ECONOMIC  EXPLOITATION      197 

chun  Railway  < >n  October  16,  1912.-"  The  South  Man- 
churia Railway  furnished  half  of  the  capital,  repayable 
by  the  Chinese  Government  twenty-five  years  from  the 
date  of  the  opening.27  In  the  Treaty  of  May  25,  1915, 
the  revision  of  the  Kirin-Changchuh  Railway  loan  agree- 
ment was  stipulated,  "taking  as  a  standard  the  provisions 
in  railway  loan  agreements  made  heretofore  between 
China  and  foreign  financiers,"  (Article  7),  and  also  en- 
gaging the  Chinese  Government  to  extend  to  this  rail- 
way any  better  terms  which  might  be  granted  to  other 
railway  contractors  (Article  7).  "The  effect  of  this 
undertaking,"  said  the  Chinese  official  statement  of  1915, 
"is  to  transfer  the  capital  originally  held  by  the  Chinese, 
11  as  the  full  control  and  administration  of  the  rail- 
way, to  the  Japanese."  M  By  the  exchange  of  notes  on 
October  5,  1913,-9  Japan  obtained  the  railway  concessions 
from  Supingkai  via  Chengchiatun  to  Taonanfu,  from 
Kaiyuan  to  I  Iailungchang,  and  from  Changchun  to  Tao- 
nanfu. Ey  the  preliminary  agreement  for  loans  to  build 
four  railways  in  Manchuria  and  Mongolia  on  September 
28,  1918,™  the  construction  of  the  four  railways  was  con- 
tracted, from  Jehol  to  Taonan,  from  Changchun  to  Tao- 
nan,  from  Kirin  via  Hailung  to  Kai-Vuan,  and  from  a 
point  between  Jehol  and  Taonan  to  some  point  on  the  sea- 
coast.  All  these  railway  concessions,  with  the  -ingle  ex- 
ception of  the  Taonanfu-Jehitl  Railway  and  the  railway 
connecting  a  point  on  the  Taonanfu-Jehol  Railway  with 

a  seaport,  arc  to  be  OUtside  of  the  SCOpe  of  the  New  In- 
ternational Banking  Consortium.81  Aside  from  these, 
under  the  'I 'erauchi  Cabinet,  the  Kirin-1  lueining  Rail- 
way loan  was  contracted  in   1918,M  and  a  loan  of  30,- 

000,000  Yen  was  made  with  all  the  forests  and  gold 
mines  in   Kirin  and   Eieilungkiang  as  securities.         In  the 

same  year,  a  cone     ion  for  continuing  the  Kirin-Chang- 

chun  line  to  the  Korean  border  was  granted.  ' 

More  than  these,  the   Treaty  of  May  2?,  1915,  respect- 
ing South  Manchuria  and  Eastern  Inner  Mongolia,  eon- 


198       THE  POLICY  OF  JAPAN  IN  CHINA 

fared  greater  economic  privileges  on  the  Japanese  in 
South  Manchuria  than  ever  before.  The  terms  of  the 
South  Manchuria  Railway  and  the  Antung-Mudken  rail- 
way are  to  be  extended  to  ninety-nine  years  i  \rticle  1). 
The  whole  of  South  Manchuria  is  to  be  opened  to  the 
Japanese  (Article  3).  Japanese  subjects  are  to  be  per- 
mitted to  lease,  by  negotiation,  land  necessary  for  build- 
ing, trade,  manufacture  and  farming  (Article  2).35  The 
term  "lease  by  negotiation"  is  understood  "to  imply  a 
long  term  lease  of  not  more  than  thirty  years  and  also  the 
possibility  of  its  unconditional  renewal."  ,;  Finally,  the 
Japanese  subjects  are  granted  privileges  to  prospect  and 
select  mines  in  the  following  areas  in  South  Manchuria: 37 

FENGTIEN 

Locality  District  Mineral 

Xiu  Hsin  T?ai Pen-hsi   Coal 

Shin  Shih  Fu  Kou  .  .  .  Pen-hsi   " 

Sha  Sung  Kang  Hailung   " 

T'ieh  Ch'ang Tung-hua " 

Nuan  Ti  T'ang Chin    

An  Shan  Chan  Region  From  Liaoyang  to     " 

Pen-hsi Iron 

KIRIN  (southern  portion) 

Locality  District  Mineral 

Sha  Sung  Kang I Iolung Coal  &  Iron 

Kang  Yao Chi-lin  (  Kirin)   . .  .Coal 

Chia  P'i  Kou Hua-tien Gold 

Turning  now  from  South  Manchuria  to  Shantung,  we 
see  Japan  pursuing  the  same  policy  of  economic  exploita- 
tion.    As  we  have  seen,  by  the  Treaty  of  May  25,  1915,  " 

respecting  Shantung,  she  caused  China  to  agree  "to  give 

full  assent  to  all  matters  upon  which  the  Japanese  Gov- 
ernment may  hereafter  agree  with  the  German  Govern- 
ment relating  to  the  disposition  of  all  rights,  interests  and 
concessions  which  Germany,  by  virtue  of  treaties  or  other- 


POLICY  OF  ECONOMIC  EXPLOITATION     199 

wise,  possesses  in  relation  to  the  Province  of  Shantung" 
(Article  1),  thus  virtually  compelling  the  Chinese  Gov- 
ernment to  a  full  assent  to  the  contemplated  succession 
of  Japan  to  the  German  rights  in  Shantung.  By  Articles 
156,  157,  158  of  the  Treaty  of  Peace  with  Germany 
signed  at  Versailles  on  June  28,  1919,  she  obtained  the 
transfer  by  Germany  of  all  the  German  rights  in  Shan- 
tung, including  the  lease  of  Kiaochow,  the  submarine 
cables  from  Tsingtau  to  Chefoo  and  from  Tsingtau  to 
Shanghai,  the  Tsingtau-Tsinan  Railway  and  the  adjoin- 
ing mines.  Thus,  she  made  herself  the  sole  successor  to 
Germany  in  that  Province. 

Pursuing  the  policy  of  economic  exploitation  in  Shan- 
tung, as  elsewhere,  the  Tsingtau-Tsinan  line  yielded  in 
1917-1918  gross  receipts  of  8,196,146  yen  as  against  an 
expenditure  of  6,155,627  yen,  making  a  total  profit  in 
that  year  of  1,644.519  yen.3"  Apart  from  this  railway 
in  operation,  Japan  has  obtained  by  the  Treaty  of  May 
25,  1915,  a  concession  to  finance  the  railway  from  Che- 
foo or  Lungkow  connected  it  with  the  Kiaochow-Tsin- 
anfu  Railway  (Article  2)  ; 4U  and  by  the  Treaty  of  Sep- 
tember 28,  1918,  the  concessions  of  the  Chinan-Shunteh 
and  Kaomi-Hsuchow  Railways.41 

In  addition,  she  controls  the  mines  in  Shantung  for- 
merly belonging  to  the  Germans.  The  Chunghsiang  Col- 
liery has  an  established  annual  output  of  250,000  tons, 
the  Hungshan  mines  800,000,  the  Poshan  mines  25" 

Shantung  Besybau  560,000,  and  the  Tzechuan  Col- 
liery 1,000,000. ■'-  The  Fangtze  Colliery  is,  however,  not 
bo  promising.  It  contains  52.X  square  kilometers  of  coal 
deposit,  but  it  is  estimated  that  it  will  yield  only  one 
million  tons  mure.1  The  Chinlingchen  iron  mines  have 
a  deposit  of  310  square  kilometers,  and  the  quality  and 
quantity  are  promising.44 

Respecting  the  industrial  progress  of  rsingtau  made 
under  the  Japanese  Administration,  the  Japan  Year  Book 
says :  *8 


200       THE   POLICY  OF  JAPAN   IN  CHINA 

"In  Tsmgtau  alone  earisl  about  twenty-five  factories 
ol  note  backed  by  a  capital  of  50  million  yen.  contrasted 
with  the  17  years  of  German  rule,  during  which  time 
Tsingtau  had  only  one  beer  brewery  and  two  egg  pow- 
der manufacturing  companies,  the  development  made 
during  the  last  few  years  in  this  direction  may  be  said 
to  have  been  marked.  These  new  enterprises  are  mostly 
Japanese  and  include  milling,  brewery,  tanning,  packing, 
soap  making,  oil,  match  and  salt  manufacturing,  etc.  The 
electric  works  are  government  monopoly." 

\ 

Passing  from  Shantung,  the  next  field  of  exploitation 
to  be  considered  is  the  Hanyehping  Company  and  it 
cessories,  a  company  composed  of  the  Hanyang  Iron 
Works,  the  Tayeh  Iron  Mines  and  Pinghsiang  Colliery, 
corresponding  in  significance  and  influence  to  the  Bethle- 
hem Steel  Corporation.  The  Tayeh  iron  field  is  among 
the  richest  in  the  world.  "It  consist-  of  a  range  of  nine 
low  hills,  containing  sixty-seven  percent  of  iron  ore. 
The  official  Japanese  survey  of  the  mine  proper 
that  the  iron  vein  is  265  feet  thick  and  of  immeasurable 
length  and  depth,  the  amount  of  ore  being  estimated  at 
700,000,000  tons."  It  yields  an  annual  output  of  700,000 
tons.47  The  Pinghsiang  coal  field  in  Kiangsi  covers  a 
total  area  of  over  200  square  miles,  of  which  only  twenty- 
one  square  miles  are  yet  being  worked.  It  has  a  pos- 
sible supply  of  500,000,000  tons  and  an  annual  output  of 
750,000  tons.48 

Before  the  Chinese  Revolution,  Japan  had  contra 
with  the  company  for  the  supply  of  pig  iron  and  iron 
which  went  to  the  Japanese  Imperial  Iron  Works 
at  Wakamatsu.  During  the  Revolution,  when  the  Han- 
yehping was  closed,  the  Japanese  Imperial  Iron  Works 
at  Wakamatsu  had  to  stop  and  make  contracts  with  the 
Tata  Company  at  Bombay.48  After  the  revolution,  in 
1913,  Japan  effected  a  loan  of  less  than  £2.000,000  to  the 
Hanyehping  Company  through  Shen  Kun-pao,  the  largest 
share-holder  of  the  Hanyehping,     Yuan  Shih-Kai  vetoed 


POLICY  OF  ECONOMIC  FAPLOITATION     201 

the  loan  agreement  as  being  contrary  to  the  mining  laws 
of  1913,  but  it  was  of  no  avail,  as  the  decree  was  issued 

after  the  contract  had  been  concluded.50 

The  Japanese  Loan  was  made  upon  the  security  of  the 
property  of  the  company,  and  on  these  conditions:  First, 
the  Hanyehping  Company  shad  repay  it  in  forty  years 
by  sale  of  fifteen  million  tons  of  iron  ore  and  eight  mil- 
lion tons  of  pig-iron  in  addition  to  the  amount  already 
contracted  for.  Second,  the  Japanese  shall  have  pref- 
erence in  future  loans.  Third,  the  company  shall  employ 
a  Japanese  "highest  engineering  adviser"  and  an  "auditor 
adviser."  Further,  the  title  deeds  of  the  Company  shall 
be  deposited  in  a  safe  having  two  keys,  of  which  the 
Japanese  shall  hold  one.'1  By  means  of  this  loan  trans- 
action, thirty-three  percent  of  the  entire  output  of  iron 
ore  and  about  fifty  percent  of  the  entire  yield  of  pig-iron 
are  at  present  to  go  to  Japan  annually  ;  and  this  in  spite 
of  the  rise  in  value  of  these  exports  from  two  million 
taels  in  1913  to  nineteen  million  taels  in  1918.  - 

As  this  loan  did  not  give  Japan  the  control  of  the 
Company,  a  Sino-Japanese  Corporation  was  formed,  tak- 
ing over  the  interests  of  Shen  Kun-pao ;  hut  the  Chinese 
mining  law  of  1913,  prohibiting  foreigners  from  owning 
more  than  fifty  percent  of  the  stock  of  a  Chinese  mining 
company,  prevented  the  consummation  of  the  plan.1  Con- 
sequently, Group  Three  of  the  Twenty-one  Demands  re- 
lating to  the  Hanyehping  Company  forced  the  Chinese 
Government  to  give  assent  to  a  joint  enterprise  if  the 
Japanese  and  the  Chinese  capitalists  should  agree  upon 
cooperation  in  future.  The  pledge  was  also  secured  from 
the  Chinese  Government  "not  to  confiscate  the  said  com- 
pany, no]-,  without  the  consent  of  the  Japanese  capitalists 
to  convert  it  into  a  state  enterprise,  nor  came  it  to  bor- 
row and   use   foreign   capital   other   than  Japanese  ' 

Further,  Group  Hiree  of  die  original  Twent)  one  he 
tnands  revealed  the  de  igns  of  Japan,  not  only  upon  the 
Hanyehping  Company,  but  al  i  die  mines  of  the 


202       THE  POLICY  OF  JAPAN  IN  CHINA 

Central  Provinces  in  the  Yangtze  Valley, — Hupeh,  Hu- 
nan, and  Kiangsi.  It  practically  aimed  at  the  monopoly 
of  the  minerals  of  these  provinces.    Article  Two  of  Group 

Three  of  the  original  demands  read: 

"The  Chinese  Government  agrees  that  all  mines  in 
the  neighborhood  of  those  owned  by  the  Hanyehping 
Company  shall  not  be  permitted,  without  the  consent  of 
the  said  company,  to  be  worked  by  other  persons  outside 
of  the  said  company,  and  further  agrees  that  if  it  is 
desired  to  carry  out  any  undertaking  which,  it  is  ap- 
prehended, may  directly  or  indirectly  affect  the  interests 
of  the  said  company,  the  consent  of  the  said  company  shall 
first  be  obtained."  os 

The  language  of  this  article  was  so  general  that  it 
could  be  practically  made  to  mean  the  monopoly  of  the 
mines  in  Hupeh,  Hunan  and  Kiangsi,  where  the  operations 
of  the  Hanyehping  Company  were  carried  on.  The  mines 
in  the  neighborhood  of  those  owned  by  the  Company  were 
not  to  be  worked  by  other  persons  outside  of  the  com- 
pany, and  the  neighborhood  was  purposely  left  indefinite 
and  undefined.  Tims,  the  doors  of  the  Central  Yangtze 
provinces  would  be  closed  to  the  mining  enterprises  of 
any  other  party  but  the  Hanyehping  Company,  of  which 
Japan  sought  to  make  a  Chino-Japanese  joint  concern. 
Again,  the  second  part  of  the  article  requiring  the  con- 
sent of  the  company  for  any  undertaking  which  might 
directly  or  indirectly  aiTect  the  interests  of  the  said  Com- 
pany was  worded  so  vaguely,  as  to  be  capable  of  being 
interpreted  to  cover  all  kinds  of  enterprises  that  might 
compete  with  the  company  or  affect  its  interests  in  any 
way.  This  would  mean  that,  throughout  China  or  at 
Central  China,  the  Hanyehping  Company  would  en- 
joy the  monopoly  of  the  iron  industry  and  exclude  any 
competitors  or  conflicting  interests.  In  short,  had  the 
original  article  been  granted,  Japan  would  have,  through 
the  instrument  of  the  Hanyehping  Company,  practically 


POLICY  OF  ECONOMIC  EXPLOITATION     203 

obtained  the  monopoly  of  the  mines  of  the  Central  Yang- 
tze Provinces  and  a  monopoly  of  the  iron  industry  in 
China. 

Turning  from  the  Hanyehping  Company,  Japan  has  in- 
terests in  other  parts  of  China.  In  Anhui  Province,  the 
Sino-Japanesc  Industrial  Company  owns  the  Taochung 
Iron  Mines,  having  visible  ore  of  60,000,000  tons — sixty- 
five  per  cent  pure.50  Japan  has  concessions  for  large  de- 
posits in  Fukien  near  Amoy.57  The  Terauchi  Cabinet 
also  concluded  the  Communication  Bank  Loan,58  and  the 
Telegraph  Loan.5"  Japan  can  also  tap  the  fabulous 
wealth  of  Shansi  Province  by  the  completion  of  the  Tsi- 
nan-Shunteh  line  and  the  connection  of  Tsingtau-Tsinan 
Line  with  the  Lung-Hai  Railway.00 

In  addition  to  the  interests  already  acquired,  Japan  has 
made  several  attempts  of  greatest  significance  to  exploit 
the  riches  of  China.  She  sought  to  obtain  the  wine  and 
tobacco  monopoly,  both  in  trade  and  tax  collection,  by 
the  offer  of  a  loan  of  30,000,000  yen.01  Nishihara  sought 
to  acquire  the  monopoly  of  the  foreign  trade  of  China 
through  the  organization  of  the  Chung  Hua  Trading  Co., 
against  which  the  United  States  protested. M  In  her 
proposal  to  remit  the  balance  of  the  Boxer  indemnity,  the 
Japanese  Government  stipulated,  besides  the  requirement 
of  the  presence  of  a  Japanese  adviser  at  the  conference 
for  considering  proposals  to  be  submitted  by  the  Chinese 
Government  at  the  Peace  Conference,  and  of  the  ab- 
stention from  foreign  loans  other  than  Japanese  dur- 
ing the  war,  that  Japan  should  direct  the  use  of  the  in- 
demnity so  remitted,  and  control  the  export  of  China's 
iron,  cotton  and  wool.'  Finally,  Japan  made  desperate 
efforts  to  control  -till  other  in.n  mines  of  China.  The 
Japanese  financiers,  together  with  some  (  hinese,  organ- 
ized the  Mulling  Co.,  to  develop  the  famous  Fenghuang- 

shan  imn  mine-  near  Nanking,  which  has  BOUght  to  obtain 


20*       THE  POLICY  OF  JAPAN  IX  CHINA 

a  license  from  the  Chinese  Government  for  the  under- 
taking     In   1918,  Japan  proposed  a  loan  of   100,000,000 

yen  <m  the  hypothecation  of  the  various  iron  deposits  in 
China,  including  those  at  Lung-Kwan,  Shienhwa,  Tayeh, 
Ybchow,  Fenghuangshan  and  those  in  Shantung  and  An- 
nul" 

In  recapitulation,  we  may  state  that  with  respect  to 
railway  concessions.  Japan  has  dominated  South  Man- 
churia. Eastern  inner  Mongolia  and  Shantung  with  stra- 
tegic  lines ;  that  with  reference  to  mines,  -lie  owns  or  con- 
trols the  two  greatest  collieries  of  China — the  Fushan 
and  the  Pingshiang — and  con  »ut  forty  per  cent 

of  China's  total  production  of  coal  and  over  seventy-live 
per  cent  of  the  output  of  modern  equipped  mines.*6  The 
conclusion  may  also  he  inferred  that  her  recent  attempts 
indicate  her  desire  to  control,  if  not  to  monopolize,  the 
foreign  trade  and  iron  industry  of  China.  Thus,  per- 
sistently, Japan  has  pursued  a  policy  of  economic  ex- 
ploitation in  regard  to  China,  a  policy  she,  quite  ohviously, 
intends  to  continue. 


XOTES  TO  CHAPTKR  XI 

1.  Statesman's  Year  Book.  1900,  i».  1018,  on  December  31.  1918. 

2.  Stateman's  Year  Book,  1920,  p.  1017. 

3.  K.   K.   Kawakanii,    lapan  in  World    Politics,  pp.  49-50. 

4.  Statesman's  Year  Book,  1920,  p.  1018. 

5.  Japan  Year  Book,  1920-21,  p. 

6.  lapan   Year   Book,   1920-21,  p. 

7.  lapan    Year    Bo 

8.  Japan   Year   Book,   1920  21,   p.  559 

9.  K.  K.  Kawakanii.    lapan  and  the  World    Peace,  p.   163. 

10.  lapan    Year    Book,    L920  21,   p 

11.  Japan   Year  Book,  1920-21,  pp.  561-562. 

12.  K.  K.   Kawakanii,    lapan  and  the  World   Peace,  p.  164. 

13.  U.  S.  For.  ReL,  1905,  pp.  82 

14.  Japan  Year  Book,  1920  21,  p.  74<i. 

15.  Lancelot  Lawton,  Vol.  2.  p.  1165;   lapan  Year  Book,  192C- 
21.  p.  742. 

16.  Japan   Year   Book,    1920-21,   p.  741. 


POLICY  OF  ECONOMIC  EXPLOITATION     205 

17.  Japan  Year  Book,  1920-21.  pp.  741-742. 

18.  Japan  Year  Book,  1920-21,  p.  742. 

19.  Japan  Year  Book,  1920-21,  p.  742. 

20.  Japan  Year  Book,  1920-21,  p.  741. 

21.  Japan  Year  Book,  1920-21,  p.  741. 

22.  Japan  Year  Book,  1920  21,  \>.  741. 

23.  Japan  Year  B  21,  p.  743. 

24.  Japan  Year  Book,  1920-21,  p.  743. 

25.  Hand  in  hand  with  tin-  South  Manchuria  Railway  Company 
there  is  the  Manchurian  Export  Guild.  It  aims  to  monopolize  the 
foreign  trade  of  Manchuria.  For  a  brief  account  see  Overlack, 
Foreign  Financial  Control  in  China,  p.  172. 

26.  MacMurrav,   1907/3;    lapan   Year  Book,  1920-21,  p.  743. 
fapan  War  Book,  1920-21,  p.  743. 

28.  The  Chino-Japanese  Negotiations,  1915,  pp.  8-9. 

29.  MacMurrav.  1913/9. 

30.  The  Shantung  Question,  submitted  by  China  to  the  Paris 
Peace  Conference,  published  by  the  Chinese  National  Welfare 
Society  <>f  America.  March.  1920.  p.  69. 

31.  Lamont's  Reply  to  Mr.  Kajiwara,  President  of  the  Yoko- 
hama Specie  Bank,  Millard's  Review,  October  23,  1920,  p.  386; 
Documents  Concerning  the  New  Consortium,  released  to  press 
by  the  Department  of  State.  March  30,  1921,  Exchange  of  Letters 
between  Laniont  and  Kajiwara,  May  11,  1920. 

32.  MacMurray,  1918/9. 

33.  MacMurray,  1918/11. 

34.  Millard,  Democracy  and  the  Eastern  Question,  p.  191. 

35.  MacMurray,  1915/8;  The  Shantung  Question,  op.  cit.,  p.  30 
et  seq. 

36.  MacMurray,  1915/8;  The  Shantung  Question,  op.  cit.,  ex- 
change of  notes  n  S]  ling  the  explanation  of  "Lease  by  Nego- 
tiation" in  South  Manchuria,  pp.  33-34. 

37.  The  Shantung  Question,  op.  cit..  p.  32;  MacMurray,  1915/8. 

38.  MacMurray,  1915/8;  the  Sino-Japanese  Negotiations,  1915, 
p.  49  et  seq. 

39.  Japan  Year  Book,  1920-21.  p.  746. 

40.  The  Sino-Japanese  Negotiations,  1915,  p.  50. 

41.  The   Shantung  .   op.   cit.,   pp.  66-67;    MacMurray, 
16, 

42.  Po<  l(    .  I'm'  u  '  Policy,  p.  192. 

43.  \-u.  Sept  19,  p.  905. 

44.  Ibid. 

45.  Japan  Year  Book,  1920  21,  p.  746. 

46.  l  ooley,  op  cit,  p.  161;  Coleman,  The  Far  East  Unveiled, 
p.  .  l. 

47.  Pooley,  op.  cit,  p.  191. 

48.  Pooley,  ibd.,  p.  162. 

49.  Pooley,  ibid.,  p.  1( 

50.  Pooley,  ibid.,  p.  162. 

51.  H.  K.  Tong,  art  on  Japan's  Railway  Program  in  China, 
Millard's  Review,  June  12,  1920;  Coleman,  op.  at.,  p,  63  et  secj. 


206       THE  POLICY  OF  JAPAN  IN  CHINA 

52  II.  K.  Tong,  art.  on  Japan's  Railway  Program  in  China, 
Millard's  Review,  June  12,  1920,  p.  65. 

53.  Pooley,  <>p.  cit.,  pp.  162  163. 

54.  The  Sino-Japanese  Negotiations,  pp.  C7-68;  MacMurray, 
1915/8. 

55.  The  Sino-Japanese  Negotiations,  1915,  p.  21. 

56.  Poolev,  op.  cit..  p.  191. 

57.  Millard's  Review.   June  23,  1917,  pp.  67-69. 
MacMurray,  l'>17/9. 

59.  MacMurray,  1918/7. 

60.  For  a  list  of  loans  made  by  the  Japanese  from  January  1, 
1909,  to  October  25,  1918,  sec  Millard,  Democracy  and  the  Eastern 
Question,  p.  187. 

61.  H.  K.  Tong,  art.  on  Japan's  Seeking  China's  Tobacco 
Monopoly,  Millard's  Review,  June  8,  1918,  p.  49  et  seq. 

62  H.  K.  Tong,  article  on  America  Protests  Against  the 
Chinese  Trading  Monopoly,  Millard's  Review,  November  9,  1918, 
p.  388  et  seq. 

63.  H.  K.  Tong,  article  on  Japan's  Conditions  for  Remitting 
Her  Share  of   Boxer  Indemnitv,  Millard's   Review,  October  26, 

1918,  p.  303  et  seq. 

64.  H.  K.  Tong,  article  on  Japan's  Newest  Intrigue  for  Pos- 
session  of   China's   Iron   Mines,    Millard's   Review,   January    18, 

1919,  p.  233  et  seq. 

65.  Pooley,  Japan's  Foreign  Policy,  p.  192. 


XII 
THE  POLICY  OF  TERRITORIAL  EXPANSION 

As  we  have  already  indicated,  the  policy  of  territorial 
expansion  is  one  of  two  ways  for  solving  the  population 
problem  of  Japan.  Barred  by  the  Gentlemen's  Agree- 
ment with  the  United  States,  and  by  the  colonies  of  Great 
Britain,  Japan  was  forced  to  alleviate  the  congestion 
and  consequent  economic  misery  of  surplus  population, 
by  finding  an  outlet  on  the  Asiatic  mainland.  Confined 
within  the  narrow  limits  of  her  small  islands,  she  was 
in  constant  fear  of  being  some  day  deprived  of  any 
channels  of  expansion  and  smothered.  Unless  she  face 
stagnation,  congestion,  and  misery,  she  must  seek  some 
territory  to  which  she  can  send  her  surplus  sons  and 
daughters. 

Searching  for  an  outlet,  she  finds  that  her  first  avail- 
able region  of  colonization  is  her  own  northern  Island, 
Hokkaido,  which  can  hold  five  times  as  many  people 
as  its  present  population  of  2,200,000. 1  But  the  Island 
is  mountainous  and  its  winter  severe  and  protracted. 
The  second  available  territory  is  Korea,  which  can  at 
least  support  twice  as  many  people  as  her  present  popu- 
lation of  about  15,000,000.  But  Korea  has  a  density  of 
population  of  169  per  square  mile  and  offers  no  great 
attraction  for  Japanese  settlers.2  The  third  region  that 
Japan  logically  looks  to  for  amelioration  on  the  main- 
land is  South  Manchuria.  Though  as  thickly  populated 
as  Korea,  great  natural  resources  and  the  fertility  of  the 
soil  nevertheless  ofTcr  many  attractions  fur  Japanese 
colonization. 

Aside  from  the  natural  attraction  afforded  by  the 
country,  Japan  feels  that  she  has  a  special  claim  to  South 

207 


208       THE  POLICY  OF  JAPAN  IX  CHINA 

Manchuria.  By  the  Sino-Japanese  War,  she  obtained 
possession  of  the  Liaotung  peninsula  forming  the  pro- 
jection of  the  southern  half  of  Manchuria,  but  because 

of  the  tripartite  intervention  she  was  constrained  to  dis- 
gorge this  territory.  Though  deprived  of  the  cession, 
she  still  cherishes  the  desire  and  hope  of  some  day  re- 
gaining it.  What  is  more,  she  fought  Russia  and  so 
saved  South  Manchuria  from  her  clutches.  She  staked 
her  whole  national  existence  on  the  struggle;  she  spent 
about  a  billion  yen  and  lost  over  one  hundred  thousand 
lives.     Therefore, 

"Considering  that  every  inch  of  South  Manchurian  soil 
was  soaked  with  Japanese  blood  and  that  their  coffers 
were  left  sadly  depleted  by  the  war,  it  would  not  have 
been  surprising  if  the  Japanese  in  the  wake  of  the  great 
conflict  had  been  tempted  to  regard  Manchuria  as  their 
own  territory  by  right  of  conquest,  and  to  adopt  these 
discriminating  measures  calculated  to  advance  their 
trade."  3 

Again,  it  was  said : 

"Manchuria  is  consecrated  to  Japan  by  the  blood  of 
dead  Japanese  soldiers."4 

Furthermore,  the  traditional  ambition  for  a  Greater 
Japan  impels  the  government  to  the  policy  of  territorial 
expansion  in  the  direction  of  Eastern  Asia.  Yoshida, 
the  great  teacher  of  "Patriotic  Schools,"  among  whose 
famous  disciples  were  ECido,  Inouye  and  Ito,  advocated 
the  expansion  of  Japan  in  Asia  by  force  of  arms.  His 
program  included  the  acquisition  of  the  Kurile  Islands, 
Saghalien,  Kamchatka,  Formosa,  Korea,  Manchuria,  and 
a  large  part  of  Eastern  Siberia — with  a  view  to  the  ex- 
pansion of  Japan  into  an  Eastern  Asiatic  power.8 

For  these  reasons  therefore — the  economic  pressure  of 
surplus  population,  the  special  claim  to  South  Manchuria 


POLICY  OF  TERRITORIAL  EXPANSION     209 

and  the  traditional  ambition  of  a  Greater  Japan — the 
Yamato  race  has  set  her  heart  on  the  domination,  if 
not  the  annexation,  of  South  Manchuria.  Professor 
Tomizu,  M.P.,  of  the  Tokio  Imperial  University,  said 
in  1912,7  "the  present  is  the  best  possible  occasion  for 
the  solution  of  the  South  Manchuria  question,  which 
Japan  must  settle  sooner  or  later.  She  has  already  missed 
several  opportunities  for  annexing  Manchuria,  and  the 
longer  the  solution  is  postponed  the  more  difficult  it 
becomes."  In  the  memorandum  submitted  by  the  Black 
Dragon  Society  advocating  a  defensive  alliance  between 
Japan  and  China,  which  was  believed  to  be  the  fore- 
runner of  the  Twenty-one  Demands,  among  the  terms 
sel  forth  there  was  the  provision  which  betrayed  the 
intention  to  seize  the  sovereign  rights  of  South  Man- 
churia and  Eastern  Inner  Mongolia:  "China  agrees  to 
recognize  Japan's  privileged  position  in  South  Man- 
churia and  Inner  Mongolia  and  to  cede  the  sovereign 
rights  of  these  regions  to  Japan  to  enable  her  to  carry 
out  a  scheme  of  local  defense  on  a  permanent  basis."8 

Thus,  bent  on  the  control,  and  if  possible,  the  posses- 
sion of  South  Manchuria  and  Eastern  Inner  Mongolia, 
Japan  used,  as  the  basis  of  her  expansion,  Article  6  of 
the  Railroad  Convention  between  Russia  and  (Tina  of 
1896, ,J  which  she  had  inherited  from  Russia  by  virtue  of 
ssion  of  the  Southern  Portion  of  the  Chinese  East- 
ern Railway  from  Changchun  to  Dalny  and  Port  Arthur, 
and  by  virtue  of  the  confirmation  of  the  transfer  by  the 
Chine  e   Governmenl    by   the   Treaty   of    December  22, 

1905,]     providing  that  Japan's  rights  in  South  Manchuria 

should,  "as  far  as  circumstances  permit,  conform  to  the 
original  agreements  concluded  between  China  and  Rus- 
si;i"  ( Art iel.  2),  \rtielc  <>  of  the  original  granl  to  Russia 
read:  "la  society  aura  le  droil  absolu  el  exclusif  de  ('ad- 
ministration '1'-  ses  terrains."  "  By  virtue  of  this  article, 
although  the  original  grant  was  qualified  by  special  pro- 
visions for  tin-  prol  i  :i"n  and  preservation  of  tin-  Chinese 


210       THE  POLICY  OF  JAPAN  IN  CHINA 

sovereignty,11  she  exercised  actual  sovereignty  over  the 
railway  zone  of  70.54  square  miles.13  She  permitted  no 
Chinese  soldiers  and  police  to  enter  the  zone  except  with 
special  permission,  and  on  the  other  hand,  she  maintained 
exclusive  police  and  military  guards  within  the  zone.14 
Thus,  she  divided  the  sovereignty  of  South  Manchuria  by 
means  of  this  narrow  strip  of  railway  zone  which  is 
entirely  under  Japanese  jurisdiction,  or,  to  use  another 
expression,  she  thus  created  an  impcrium  in  imperio, 
which  could  be  used  for  the  future  expansion  of  Japa- 
nese jurisdiction  over  South  Manchuria.  Further,  she 
established  Japanese  settlements  at  most  of  the  stations 
along  the  railway  and  attempted  thereby  to  found  a  series 
of  Japanese  towns. — "Thus,  there  will  be  a  strip  of  ter- 
ritory running  through  the  heart  of  South  Manchuria 
which  to  all  intents  and  purposes  will  become  a  Japanese 
Colony."  " 

More  than  this,  she  adopted  the  policy  of  settlement 
under  the  Japanese  jurisdiction  and  sovereignty.  By 
stretching  the  interpretation  of  the  extra-territorial  rights, 
she  established  police  boxes,  and  even  jails  and  houses 
of  detention  in  connection  with  her  consulates.  She  main- 
tained that  the  assumption  of  the  police  power  over  her 
own  subjects  was  but  a  corollary  of  extra-territorial  juris- 
diction, which,  however,  was  not  claimed  by  the  other 
treaty  Powers  enjoying  similar  privileges : 

"In  short,  the  establishment  of  stations  for  Japanese 
police  officers  in  South  Manchuria  and  Eastern  Inner 
Mongolia  is  based  on  consular  jurisdiction  and  its  aim  is 
efficiently  to  protect  and  discipline  Japanese  subjects,  to 
bring  about  a  completely  satisfactory  relationship  between 
the  officials  and  people  of  the  two  countries,  and  gradu- 
ally to  develop  the  financial  relations  between  Japan  and 
China.    The  Chinese  Government  is  requested  speedily  to 

the  demands  precisely  as  it   has   the   establish- 
ments of  consulates  and  consular  agents  in  the  interior 


POLICY  OF  TERRITORIAL  EXPANSION     211 

of  South  Manchuria  in  pursuance  of  the  policy  to  main- 
tain the  friendly  relations  between  China  and  Japan."  15 

And,  maintaining  that  contention,  she  made  repeated 
attempts  to  secure  the  recognition  of  the  right  to  sta- 
tion police  in  South  Manchuria  and  Eastern  Inner  Mon- 
golia.   On  October  18,  1916, 1S  she  submitted  this  demand: 

"According  to  the  new  treaty  concluded  last  year  re- 
specting South  Manchuria  and  Eastern  Inner  Mongolia, 
Japanese  subjects  shall  have  the  right  of  residence,  travel 
and  commercial  and  industrial  trade  in  South  Manchuria 
and  the  right  to  undertake  agricultural  enterprises  and 
industries  incidental  thereto  in  the  Eastern  part  of  Inner 
Mongolia  jointly  with  Chinese  subjects.  The  number  of 
Japanese  subjects  in  South  Manchuria  and  Eastern  Inner 
Mongolia  will,  therefore,  inevitably  increase  gradually. 
The  Imperial  Government  of  Japan  considers  it  neo 
to  station  Japanese  police  officers  in  these  regions  for  the 
purpose  of  controlling  and  protecting  their  own  subjects. 
[t  is  a  fact  that  a  number  of  Japanese  police  officers  have 
already  been  stationed  in  the  interior  of  South  Manchuria 
and  they  have  been  recognized  by  the  local  officials  of 
the  localities  concerned  since  intercourse  has  been  con- 
ducted between  them.  The  Imperial  Government  of  Japan 
proposes  gradually  to  establish  additional  stations  for  Jap- 
anese police  officers  in  the  interior  of  South  Manchuria 
and  Eastern  Inner  Mongolia  whenever  and  wherever 
necessary." 

Thus.  Japan  aimed  to  extend  her  sovereignty  wh<  i 

ubjectS  should  go  in   South   Manchuria  and   Eastern 

Inner    Mongolia.      Following   this  policy   to   its   1 

Conclusion,    and    especially    in    view    of    the    fact    that    the 

whole  of  South  Manchuria  has  been  thrown  open  to 
Japanese  subjects  by  the  Treat}  of  May  25,  I'M 5.  r< 

in1.;  South  Manchuria  and  Eastern  Inner  Mongolia  (Ar- 
ticle 3),  she  can  extend  her  nty,  wherever  her 

subjects   go.      Thus,   under   the  guise   of    peaceful    settle- 


212      THE  POLICY  OF  JAPAN  IN  CHINA 

ment,  the  process  is.  in  reality,  a  political  invasion,  paving 
the  way  for  territorial  absorption. 

Not  contented  with  the  policy  of  settlement  under 
Japanese  jurisdiction  and  sovereignty,  Japan,  in  1915, 
made  the  bold  attempt  to  capture  the  sovereignty  of  South 
Manchuria  and  Eastern  [nner  Mongolia  by  means  of  the 
Twenty-One  Demands.  In  group  Two  of  the  original 
demands,  Article  Two  provided  for  the  Japanese  owner- 
ship of  land.  It  read:  "Japanese  subjects  in  South  Man- 
churia and  Eastern  Inner  Mongolia  shall  have  the  right 
to  lease  or  own  land  acquired  either  for  erecting  suitable 
buildings  for  trade  and  manufacture  or  for  farming."  18 
Land  in  South  Manchuria  and  Eastern  Inner  Mongolia 
being  very  cheap,  the  grant  of  the  privilege  of  owning 
it  would  give  her  and  her  subjects  the  opportunity  to  own 
the  entire  territory  of  these  two  regions  by  systematic 
purchase  and  manipulation  of  land  prices  through  Japa- 
nese banks  operating  therein.  The  Chinese  Official  State- 
ment of  1915  regarding  the  Chino-Japanese  negotiations 
on  the  Twenty-one  Demands  said:  "Should  Japanese  sub- 
jects be  granted  the  right  of  owning  land,  it  would  mean 
that  all  the  landed  property  in  the  region  might  fall 
into  their  hands,  thereby  endangering  China's  territorial 
integrity."  20 

Side  by  side  with  the  demand  for  the  right  to  own 
land,  Japan  demanded  the  exercise  of  police  power  in 
important  places  in  China.  In  Group  V.  Article  3,  of  the 
original  demands,  we  read  : 

"Inasmuch  as  the  Japanese  Government  and  the 
Chinese  Government  have  had  many  cases  of  dispute 
between  Japanese  and  Chinese  police  to  settle  cases  which 
caused  no  little  misunderstanding,  it  is  for  this  reason 
necessary  thai  the  police  departments  of  important  places 
(in  China)  shall  be  jointly  administered  by  Japanese 
and  Chinese,  or  that  the  police  departments  of  these 
places  shall  employ  numerous  Japanese,  so  that  they  may 


POLICY  OF  TERRITORIAL  EXPANSION     213 

at  the  same  time  help  to  plan  for  the  improvement  of 
the  Chinese  Police  Service." 

As  the  police  power  is  a  concrete  symbol  of  sovereignty, 
this  demand  for  the  joint  administration  of  police  is 
tantamount  to  a  demand  for  the  sovereignty  of  China. 
While,  however,  the  demand  covered  the  whole  of  China, 
it  was  meant  to  apply  particularly  to  South  Manchuria 
and  Eastern  Inner  Mongolia.  The  Chinese  official  state- 
ment of  1915  regarding  the  negotiations  runs  as  follows: 

"The  proposal  that  there  should  be  joint  administra- 
tion by  China  and  Japan  of  the  police  in  China  was 
clearly  an  interference  with  the  republic's  domestic  affair, 
and  consequently  an  infringement  of  her  sovereignty. 
For  that  reason  the  Chinese  Government  could  not  take 
the  demand  into  consideration.  But  when  it  was  ex- 
plained by  the  Japanese  minister  that  this  referred  only 
to  South  Manchuria,  and  he  suggested  that  his  govern- 
ment would  be  satisfied  if  China  agreed  to  engage  Japa- 
nese police  advisers  for  that  territory,  the  Chinese  Gov- 
ernment accepted  the  suggestion."  -1 

Whatever  the  intention  of  this  demand,  had  it  been 
granted,  Japan  would  have  acquired  the  power  of  jointly 
administrating  the  police  in  important  places  of  China, 
especially  in  South  Manchuria  and  probably  Eastern  Inner 
Mongolia,  which  would  have  virtually  meant  the  cession 
.(■reign  rights  in  these  regions, — which  the  Black 
Dragon  Society  had  petitioned  the  Japanese  Government 
to  obtain.  Coupled  with  the  right  of  owning  land,  such 
an  arrangement  would  have  rendered  the  regions  in  ques- 
tion actual  colonies  of  Japan. 

Failing  in  this  move,  Japan  made  of  the  *  !hangchiatung 
Affair  another  attempt  to  wrest  th(  pity  of  South 

Manchuria  and  Eastern  Inner  Mongolia  from  the  hands 
oi  the  Chinese  Government.  Barring  the  usual  satis- 
faction for  the  (  hangchiatung  Affair,  she  demanded  the 

employment  ot'  Japanese  military  advisers  in  South  Man- 


214       THE  rOLICY  OF  JAPAN  IN  CHINA 

churia.  and  of  military  instructors  in  the  Cadet  schools, 
and  the  establishment  of  police  stations  in  South  Man- 
churia and  Eastern  Inner  Mongolia.11  Mad  these  de- 
mands been  conceded,  it  would  have  meant  the  Japanese 
control  of  the  military  development  of  South  .Manchuria 
and  granting  of  the  police  power  over  Japanese  subjects 
in  South  Manchuria  and  Eastern  Inner  Mongolia. 

Finally,  when  the  new  Consortium  was  being  organized 
in  1919-1920,  Japan  qualified  the  participation  of  her 
financial  group  with  the  reservation  that  South  Manchuria 
and  Eastern  Inner  Mongolia  should  be  excluded  from 
its  scope.28*24  Thus,  by  this  diplomatic  stroke,  she  at- 
tempted to  secure  the  recognition  of  the  Great  Power-  as 
to  her  special  political  status  in  these  regions  and  her 
right  to  exclusive  exploitation  of  the  same.  Hence,  if 
China  should  in  the  future  come  under  the  control  of 
the  New  Consortium  and  thus  lose  her  independence. 
Japan  would  have  saved  these  two  regions  from  a  similar 
fate,  and  would  be  free  to  snatch  them  from  the  grip 
of  the  Consortium  and  incorporate  them  under  her  own 
sovereignty.38 

It  is,  therefore,  reasonable  to  conclude  that  Japan  did 
entertain  the  design  of  controlling,  if  not  of  possessing, 
South  Manchuria  and  Eastern  Inner  Mongolia.  Im- 
pelled by  the  economic  pressure  of  an  increasing  popu- 
lation at  home,  supported  by  the  special  claim  growing 
out  of  the  Russo-Japanese  War,  and  inspired  by  the  tra- 
ditional ambition  of  a  Greater  Japan,  she  has  set  her 
heart  on  the  policy  of  territorial  expansion  in  these  two 
regions.  Using  Article  Six  of  the  Russo-Chinese  Rail- 
way Convention  of  1896  as  a  basis,  she  planned  to  extend 
her  sovereignty  over  these  regions,  by  the  creation  of  the 
imperium  in  itnperio  in  the  railway  zone,  the  establish- 
ment of  police  stations,  and  the  repeated  attempts  to  wrest 
the  police  power  from  the  Chinese  Government.*0 


POLICY  OF  TERRITORIAL  EXPANSION     215 


NOTES  TO  CHAPTER  XII 

1.  K.  K.  Kawakami,  Japan  in  World  Politics,  p.  58. 

2.  Ibid.,  p.  58. 

3.  Ibid.,  p.  131. 

4.  Patrick  Gallagher,  America's  Aims  and  Asia's  Aspirations, 
p.  407. 

5.  J.  O.  P.  Bland,  article  on  Moral  Factors  in  Japanese 
Policies,  Asia,  March,  1921,  p.  217. 

6.  John  Spargo,  Russia  as  an  American  Problem,  p.  150. 

7.  Shin  Ninon,  editor,  Count  Okuma,  April,  1912,  quoted  in 
Pooley,  Ja'  Policy,  p.  76n. 

8.  Putnam  Weale,  The  Fight  for  the  Republic  in  China,  pp. 
130-131. 

[acMurray,  1896/5. 
Ki.    MacMurray.  191)5/18. 

11.  The  society  shall  have  the  absolute  and  exclusive  right  of 
administration  of  its  territories. 

12.  Cf.  U.  S.  Foreign  Relations,  1910,  pp.  203-205,  the  letter 
of  the  Secretary  of  State  of  the  United  States  Government  to 
the  Russian  Ambassador  on  April  9,  1908. 

13.  Hornbeck,  Contemporary  Politics  in  the  Far  East,  p.  268. 

14.  [bid.,  p.  208;  Millard's  Review,  Nov.  8,  1919,  p.  399. 

15.  Lancelot  Lawton,  The  Empires  of  the  Far  East,  Vol.  2,  p. 
1167. 

16.  MacMurray,  1917/2;  W.  W.  Willoughby,  Foreign  Rights 
and  Interest  in  China,  pp.  84-85;  Japanese  Minister's  Aide 
Memoire,  Oct.  18,  1916. 

18.  MacMurray,  1917/2;  W.  W.  Willoughby,  op.  cit,  p.  83  et 
seq. 

19.  The  Sino-Japanese  Negotiations,   1915,  p.  20. 
Ibid.,  p.  12. 

21.  Ibid.,  pp.  9-10. 

22.  MacMurray,  1917/2. 

23.  T.  \\  .  Lamont,  Preliminary  Report  on  the  New  Consortium 
for  China,  p.  7. 

24.  Documents    concerning   tin-   new    consortium    released    to 
by  tin-  Department  of  State  on  March  30,  1921,  the  letter 

of   M.  Odagiri  of   tin-   VTokahoma   Sp<  to   Mr.   T.   \V. 

Lain. .nt  of  tlu-  J.   P.  M.  I  19. 

I  "!'  a  complete  account  of  the  new  consortium,  vide  infra, 
■  in  the  .New  International  Banking  Consortium, 
26.   Japan's  recenl  tern  Siberia  may  or  may 

not  effect  her  pollCJ  of  territorial  expansion  in  South  Man- 
churia and  Eastern  Inner  Mongolia  lor  an  account  of  Japan 
and  Siberia,  see  John  Spargo,  Ru  n  Problem, 

Chapter  V,  p.  lw  el  seq. 


XIII 
THE  POLICY  OF  PARAM<  >UNT  INFLUENCE 

In  the  two  preceding  chapters  we  have  examined  the 

policies  of  economic  exploitation  and  territorial  expan- 
sion,— two  of  Japan's  solutions  for  her  population  prob- 
lem. We  come,  now,  to  the  third  policy — that  of  para- 
mount influence. 

This  policy  is  actuated  in  the  first  place  by  Japan's 
desire  to  obtain  and  possess  the  largest  Chinese  sphere 
of  influence.  Being  China's  closest  neighbor  and  of  the 
same  racial  and  linguistic  family,  she  feels  that  she  ought 
to  have  the  largest  influence.  When  the  battle  of  con- 
cessions commenced  in  1898 — which  resulted  in  the  Pow- 
ers demarcating  their  respective  spheres  of  influence  on 
the  map  of  China — Japan  was  not  yet  a  full-fledged 
Power.  She  had  therefore  to  be  content  with  the  de- 
marcation of  Fukien  as  her  humble  share.  When,  by 
dint  of  extraordinary  exertion,  and  by  reason  of  her  vic- 
tory over  Russia,  she  had  achieved  the  position  of  a 
great  Power,  she  found,  to  her  regret,  that  all  the  re- 
gions in  China  had  already  been  occupied  as  Spheres  of 
other  Powers,  and  sin-  had  again  to  be  contented  with 
.South  Manchuria  which  she  had  won  by  the  sword  and 
vu  Inner  .Mongolia  attained  by  cordial  agreement 
with  Russia.  When,  however,  the  World  War  broke 
out,  leaving  China  free  for  her  expansion,  she  promptly 
seized  the  opportunity  and  extended  her  sphere  of  influ- 
ence as  far  as  China  and  the  other  Powers  would  allow 
her.  This  she  did,  partly  to  the  end  that  in  case  of  an 
eventual  break-up  or  partition  of  China,  she  would  be 
able  to  secure  the  Largest  share  of  territory.  "It  was 
because  European  Powers  were  bent  upon  dividing  China 

216 


POLICY  OF  PARAMOUNT  INFLUENCE     217 

into  so  many  spheres  of  influence  that  Japan  was  obliged 
to  step  in  and  take  such  measures  as  might  be  neces- 
sary to  safeguard  her  position  in  the  Far  East  against 
any  emergency  that  might  arise  from  an  unhappy  con- 
dition in  China."  ' 

This  policy  is  again  a  concomitant  of  Japan's  other 
policies — economic  exploitation  and  territorial  expansion. 
Economic  exploitation  requires  the  existence  of  a  sphere 
of  influence,  and  quite  logically,  the  fullest  measure  of 
economic  exploitation  requires  the  possession  of  the 
largest  sphere  of  influence.  In  order,  therefore,  to  carry 
out  this  policy  to  the  fullest  satisfaction,  the  acquisition 
of  the  largest  sphere  of  influence  is  highly  desirable,  if 
not  quite  necessary.  Likewise,  territorial  expansion  de- 
mauds  the  existence  of  a  sphere  of  influence  wherein  a 
Power  entrench  itself  against  the  authority  of  the  ter- 
ritorial sovereign  and  the  intrusion  of  other  Powers. 
While  it  is  not  indispensable,  the  possession  of  the  largest 
sphere  of  influence  will  nevertheless  help  to  consummate 
the  annexation  of  the  regions  desired. 

In  the  case  of  Japan  and  China  this  policy  is  ani- 
mated by  the  former's  desire  to  displace  the  predominat- 
ing Western  influence  by  her  own  paramount  interest. 
She  feels  chagrined  over  the  presence  of  such  an  influ- 
ence in  a  land  where,  by  virtue  of  the  similarity  of  lan- 
guage .and  race,  she  feds  that  she  ought  to  have  the 
!  share.  She  is  also  afraid  that  the  presence  of 
a  dominating  Occidental  influence  may  imperil  the  inde- 
pendence  of  (  hina  and  so  jeopardize  her  own  existence. 
Therefore,  to  check  the  further  extension  of  such  an 
influence,  she  proposes  to  displace  it  with  her  own  para- 
mount interest.  Supporting  this  view  is  the  following 
statement  : 


"It    must    be    frankly    admitted    that    ever    since    China 

opened  her  doors  i<>  Western  nations,  her  territory  has 
been  regarded  as  a  happy  hunting  ground  by  com' 


218       THE  POLICY  OF  JAPAN  IN  CHINA 

rs  of  all,  but  especially  of  European  countries.  Her 
inefficiency,  her  impotency  and  the  general  disorgani- 
zation and  corruption  of  her  administrative  system  have 
been  such  as  t<>  invite  a  veritable  universal  scramble  over 
concessions.  .  .  .  To  tin-  Japanese,  it  is  certain  that,  un- 
less they  take  the  necessary  measures  of  precaution,  the 
whole  province  of  China  will  sooner  or  later  be  held  in 
the  grip  of  Western  interests.  Of  course  she  could  not, 
even  it'  .--he  would,  undertake  to  safeguard  all  the  vast 
dominion  of  China,  hut  she  must  by  all  means  forestall 
the  establishment  of  preponderating  Western  influence 
in  such  sections  of  that  domain  as  are  contiguous  or 
adjacent  to  her  own  territories."  -"•' 

This  policy  is,  moreover,  motivated  by  Japan's  consid- 
eration of  her  own  special  position  in  China.  She  fought 
war  with  Russia,  partially  because  of  China's  incapacity 
to  resist  Russian  aggression  in  Manchuria.  By  dint  of 
supreme  sacrifice,  she  saved  Manchuria,  and  so  rendered 
China  a  distinct  and  invaluable  service.  She  also  feels 
her  exalted  mission  of  Chinese  guardianship.  Ik-ing  the 
only  nation  in  Eastern  Asia  that  has  been  able  to  resist 
successfully  the  Western  onslaught,  she  feels  that  she 
has  the  duty  of  extending  her  protection  to  the  other 
nations  of  Eastern  Asia,  particularly  China.  Further, 
her  own  economic,  and  to  a  certain  extent,  her  own  politi- 
cal existence  depends  upon  China's  prosperity  and  inde- 
pendence. Should  her  neighbor  ever  come  under  West- 
ern control,  or  what  is  worse,  should  she  ever  be  par- 
titioned, Japan  would  be  left  alone  in  the  world.  With 
the  Western  Powers  entrenched  on  the  opposite  shore 
of  her  sea,  her  own  days  of  independence  would  be  num- 
bered. As  preserver  of  Manchuria  and  protector  of 
China,  dependent  as  she  is  upon  her  and  inseparately 
interwoven  as  is  her  destiny  and  well-being  with  that 
of  China,  she  is  therefore  impelled  by  a  high  sense  of 
justification  to  put  forth  her  claim  of  a  special  position 
in  that  country. 


POLICY  OF  PARAMOUNT  INFLUENCE     219 

Turning  now  to  the  ways  in  which  this  policy  has  hcen 
executed,  we  find  that  Japan  first  established  her  para- 
mount influence  in  South  Manchuria.  As  we  have  seen, 
soon  after  she  had  obtained  the  transfer  of  the  railway 
and  mine  leases,  she  organized  the  South  Manchuria  Rail- 
way Company,  which  is  the  Japanese  Government  all  but 
in  name  and  which  dominates  the  economic  life  of  South 
Manchuria.  Besides  this,  she  closed  the  door  of  South 
Manchuria  to  the  railway  enterprises  of  other  nations. 
She  vetoed  the  Hsinminting-Fakuman  concession  granted 
to  British  interests  in  1907,  by  producing  a  secret  agree- 
ment alleged  to  have  been  signed  in  connection  with  the 
Treaty  of  December  22,  1905,  pledging  the  Chinese 
Government  not  to  construct,  prior  to  the  recovery 
by  them  of  the  said  railway  (the  South  Manchuria 
Railway),  any  main  line  in  the  neighborhood  of  and 
parallel  to  that  railway,  or  any  branch  line  which 
might  be  prejudicial  to  the  interest  of  the  above  men- 
tioned railway.4 

The  great  extension,  however,  of  her  sphere  of  influ- 
ence came  when  the  World  War  broke  out.  To  repeat, 
she  first  ousted  Germany  from  Shantung  and  seized  all 
German  interests — leaseholds,  railways,  mines,  cables — 
and  this  in  violation  of  the  sovereignty  of  China.  I  lav- 
ing accomplished  this,  she  presented  the  now  celebrated 
Twenty-one  Demands,  which,  had  they  been  fully 
granted,  would  have  given  her  the  largesl  sphere  of  in- 
fluence or  the  position  of  paramount  influence.  By 
Group  I,  she  demanded  the  assent  of  the  Chinese  Gov- 
ernment to  any  arrangement  Japan  Olighl  make  with  Ger- 
many   at    the    end    of    the    war    relatin  nu;iii 

rights  in  Shantung  (Article  1  }.  ,;  By  Articles  156,  157. 
and  158  of  the  Treat)   of   Peace  with  Germany  signed 

at    Versailles,    June    28,     1919,    she    was    made    the    sole 

successor  to  all  German  interests  and  rights  in  Shan- 
tung, thus  adding  this  Pi  tvince  to  her  sphere  <»t'  in- 
fluence. 


220       THE  POLICY  OF  JAPAN  IN  CHINA 

Nol  only  this,  but  by  Group  II  of  the  original  Twenty- 
one  Demands,  she  demanded  the  right  of  owning  land 
in  South  Manchuria  and  Eastern  Inner  Mongolia,  which, 
coupled  with  the  demand  for  the  police  power  in  "im- 
portant places"  in  China,  would,  in  due  course  of  time, 
have  made  South  Manchuria  and  Eastern  Inner  Mon- 
golia Japanese  territories.  Again,  according  to  the  same 
group  of  demands,  she  attempted  to  put  Eastern  Inner 
Mongolia  on  the  same  status  as  South  Manchuria,  which 
was.  however,  successfully  frustrated  by  the  skill  of 
the  Chinese  diplomats,  who  caused  Japan  to  be  content 
with  the  mere  opening  of  some  commercial  ports  in  that 
region.  Notwithstanding  the  failure  of  these  deeper  de- 
signs, she  was  nevertheless  successful,  by  the  Treaty  of 
May  25,  1915,  in  tightening  her  control  over  South  Man- 
churia and  Eastern  Inner  Mongolia.  For  contracting  for- 
eign loans  for  the  construction  of  railways  in  South 
Manchuria  and  Eastern  Inner  Mongolia  and  for  pledg- 
ing the  taxes  of  these  two  regions  as  securities  for  loans, 
Japan  had  first  to  be  consulted.  "If  foreign  advisers 
or  instructors  on  political,  financial,  military  or  police 
matters  are  to  be  employed  in  South  Manchuria,  Japa- 
nese  may  he  employed  first."7 

In  addition,  by  Article  6  of  Group  V,  Japan  attempted 
to  consolidate  her  position  in  Fukien  and  make  the  prov- 
ince an  exclusive  sphere  of  influence.  The  Article  read: 
"If  China  need  foreign  capital  to  work  mines,  build 
railways  and  construct  harbor  works  (including  dock- 
yards) in  the  Province  of  Fukien,  Japan  shall  he  first 
consulted."8  Had  this  demand  been  fully  granted.  Japan 
would  have  closed  another  door — and  this  time  in  the 
Province  of  Fukien.  The  final  exchange  of  notes,  how- 
ever, gave  only  a  voluntary  declaration,  on  the  part  of 
the  Chinese  Government,  in  response  to  the  Japanese 
inquiry,  that  no  permission  to  foreign  nations  had  been 
given,  nor  had  foreign  loans  been  contemplated,  "to  con- 
struct on  the  coast  of  Fukien  Province,  dock-yards,  coal- 


POLICY  OF  PARAMOUNT  INFLUENCE     221 

ing  stations   for  military  use.  naval  bases,  or  to  set  up 
other  military  establishments."  ° 

Furthermore,  Japan  also  attempted,  by  the  original 
Twenty-one  Demands,  to  extend  her  influence  into  the 
Yangtze  Valley,  thus  invading  the  British  sphere.  As 
will  be  recalled,  by  Group  III  relating  to  the  Hanyehping 
Company,  besides  the  privilege  of  joint  concern,  she  de- 
manded the  monopoly  of  mines  in  the  neighborhood  of 
those  owned  by  the  company  (Art.  2),  which,  had  it  been 
granted,  would  have  given  her  the  monopoly  of  the 
mining  privileges  of  the  Central  Yangtze  Provinces,  thus 
excluding  Great  Britain,  with  reference  to  mining  enter- 
3,  from  her  own  sphere.10  What  is  worse,  by  Arti- 
cle 5  of  Group  V,11  she  demanded  the  right  of  construc- 
ing  certain  railways  in  the  Yangtze  Valley.  "The  demand 
of  railway  concessions  in  the  Yangtze  Valley,"  said  the 
Chinese  Official  Statement  of  1915,  "conflicted  with  the 
Shanghai-Hangchow-Ningpo  Railway  of  March  6,  1908, 
the  Nanking-(  liangsha  Railway  agreement  of  March  31, 
1914,  and  the  engagement  of  August  24,  1914,  giving 
preference  to  British  firms  for  the  projected  line  from 
Xanchang  to  Chaochowfu."  v-  Thus,  had  this  demand 
been  granted,  Japan  would  have  added  to  her  sphere  of 
influence  the  Southeastern  Provinces  of  China. 

.Moreover,  when  the  Russian  Soviet  Revolution  oc- 
curred in  1917,  resulting  in  the  recession  of  Russian 
influence  from  North  Manchuria  and  Outer  Mongolia, 
Japan  again  took  advantage  of  the  situation  and  at- 
tempted to  extend  her  influence  into  North  Manchuria. 
She  dispatched  troops  to  occupy  and  guard  the  Chinese 
Eastern  Railway,  and  this  in  spite  of  the  fact  that  the 
protection  of  the  railway  was  distinctly  assigned  by  the 
allied  Agreement  concerning  the  guarding  of  the 
Chinese  Eastern  Railway,  to  the  Chinese  Government, 
which  had  well  performed  the  task.11  Simultaneously 
with  the  coup  of  Vladivostok,  she  increased  the  Dumber 


222       THE  POLICY  OF  JAPAN  IN  CHINA 

of  her  troops  along  the  Chinese  Eastern  Railway.  To 
find  an  excuse  for  their  presence,  she  instigated  bandits 
and  gave  them  aid  to  break  down  Chinese  authority  along 
the  railway.11  !1"  And  it  was  only  the  Inter-allied  Kail- 
way  Technical  Commission  that  prevented  Japan  from 
openly  seizing  it,  as  she  had  the  Tsingtau-Tsinan  Rail- 
way.17"18    It  was  said: 

"Supreme  efforts  are  being  made  by  China  to  persuade 
Paris,  London  and  Washington  not  to  dissolve  the  Inter- 
ally  Railway  Technical  Commission  in  Siberia  for  the 
simple  reason  that  China  is  fully  convinced  that  Japan 
will  seize  the  Chinese  Eastern  Railway  immediately  fol- 
lowing the  abolition  of  the  Commission.  The  Japanese 
do  not  intend  to  withdraw  their  troops  until  they  have 
exhausted  every  means  to  get  control  of  this  railroad. 
It  is  therefore  up  to  the  Peking  Government  to  do  its 
utmost  to  preserve  for  China  one  of  the  most  important 
railways  within  her  domain.  .  .  .  Simultaneously  with 
the  coup  at  Vladivostok,  the  Japanese  forces  along  the 
wdiole  Chinese  Eastern  Railway  were  increased  and  it 
looked  as  if  the  operation  of  the  line  would  be  usurped 
by  the  Japanese  authorities.  The  resistance  of  the  Inter- 
allied Commission  alone  was  responsible  for  the  pre- 
venting of  such  a  development.  .  .  ." 

Apart  from  the  extension  of  her  sphere  of  influence, 
Japan  also  aims  to  win  the  predominance  of  trade.  When 
the  great  war  came  and  Knropean  competitors  tempo- 
rarily disappeared,  she  forged  her  way  straight  ahead 
until  she  became  a  formidable  rival  of  Great  P>ritain — 
who  is  also  bent  on  trade  predominance.  Had  it  not  been 
for  her  loss  of  China's  goodwill,  due  to  the  Twenty-one 
Demands  in  1915  and  for  the  boycott  subsequent  to  the 
Shantung  Decision  in  1919,  she  would  have  probably, 
by  this  time,  outstripped  all  other  commercial  rivals  in 
China.  The  following  available  statistics  show  that, 
from  1913  to  1917,  she  almost  doubled  her  share  in  the 
total  percentage  of  China's  foreign  trade : 10 


POLICY  OF  PARAMOUNT  INFLUENCE     223 

TABLE  SHOWING    PERCENTAGES  OF  TRADE  WITH    CHINA, 
1915  TO  1917 

1913   1914   1915   1916   1917 

Japan    19.7        21.1         23.4        28.3        33.4 

British  Empire.    48.0        49.0        47.2        40.9        39.7 

Incidentally,  this  attempt  to  win  trade  predominance 
Serves  as  an  additional  impetus  towards  winning  that 
coveted  prize,  the  position  of  Inspector  General  of  the 
Chinese  Maritime  Customs.  Although  China  did  not 
promise  that  whatever  nation  gains  trade  predominance 
wins  the  office  in  question,  it  is  nevertheless  understood 
that,  upon  the  losing  of  trade  predominance,  Great  Britain 
will  automatically  lose  the  office,  and  once  she  acquires 
trade  predominance,-0  Japan  may  assert  her  claim  to  the 
office,  under  the  "most  favored  nation"  clause. 

In  attempting,  however,  to  attain  this  predominance, 
Japan  has  often  been  tempted  to  resort  to  unfair  means 
(particularly  in  Southern  Manchuria)  in  plain  violation 
of  the  Open  Door  principle  of  equal  opportunity  of  trade. 
A  system  of  rebates  was  inaugurated  by  the  South  Man- 
churia Railway,  of  which,  in  the  very  nature  of  things, 
only  the  Japanese  could  avail  themselves,  and  which  be- 
cause of  voluminous  protests,  was  abolished  in  Septem- 
ber, 1909.21  The  British-American  Tobacco  Company 
built  a  factory  in  Mukden  and  paid  the  production  tax 
as  required  by  Chinese  law,  but  the  Japanese  Govern- 
ment Tobacco  Monopoly  also  built  a  factory  ,in  New- 
chuang  and  failed  to  pay  it.  The  retail  dealers  of  the 
British-American  Tobacco  Company  submitted  to  the 
payment  of  the  tax,  but  the  agents  of  Japanese  tobacco 
refused  to  pay  the  same,  not  infrequently  backed  by 
Japanese  consuls.2-  In  the  1914  report  of  the  American 
Consul-General  at  Mukden,23  the  following  evidence  of 
discrimination  appeared: 

"The  only  bank  in  Mukden  doing  foreign  business  is 
the  Yokohama  Specie  Bank.  ...  A  general  preference 


224       THE  POLICY  OF  JAPAN  IN  CHINA 

is  given  to  Japanese  merchants  and  traders.  Rates  for 
advances  on  cargo  expected  are  as  follow^:  Japanese, 
7  percent ;  foreigners,  8  percent;  Chinese,  10  percent. 

"In  selling  their  products,  the  Japanese  have  been  fa- 
vored by  cheap  home  labor,  government  subsidies,  special 
railway  rates,  preferential  customs  treatment  and  ex- 
emption from  internal  taxation.  .  .  ." 

Other  evidences  may  be  offered,  but  suffice  it  to  sum- 
marize the  disabilities  which  other  foreign  merchants 
have  experienced  in  Manchuria  and  Shantung.24  Goods 
of  these  merchants  were  delayed  on  various  pretexts, 
while  the  goods  of  the  Japanese  were  promptly  moved. 
Special  favors  were  accorded  the  Japanese  by  the  rail- 
way under  their  control,  "including  an  obscene  system  of 
rebates." 23  Public  utilities  controlled  by  the  Japanese 
were  manipulated  "to  give  advantages  to  Japanese  mer- 
chants." Spacious  Japanese  ships  refused  to  ship  Ameri- 
can cargoes  because  of  competing  Japanese  firms,  and 
lower  rates  or  rebates  were  given  to  Japanese  shippers.28 

In  this  connection  mention  must  be  made  of  the  fact 
that  even  during  the  allied  military  intervention  in  Si- 
beria, Japan  availed  herself  of  her  military  position  to 
achieve  commercial  expansion  much  to  the  chagrin  and 
detriment  of  the  allied  expeditionary  forces.  "The  mili- 
tary trains,  supposed  to  be  used  exclusively  for  and  by 
the  joint  expedition,  were  very  largely  used  to  transport 
Japanese  merchandise  into  Siberia.  This  merchandise 
was  literally  smuggled  in  with  the  connivance  of  the 
Japanese  authorities.  It  was  a  common  occurrence  for 
trainloads  of  commercial  wares  from  Japan  to  be  sent 
from  Vladivostok  marked  as  military  stores,  at  the  time 
when  the  armies  of  the  joint  expeditionary  forces  were 
deprived  of  necessary  supplies  on  account  of  lack  of 
transportation."  ■* 

Next  to  commercial  paramountcy,  Japan  aims  at  cul- 
tural predominance  in  the  regeneration  of  China.    Hav- 


POLICY  OF  PARAMOUNT  INFLUENCE     225 

ing  acquired  Western  civilization  earlier  than  any  other 
Asiatic  nation,  and  claiming  to  be  the  harmonizer  of 
the  Eastern  and  Western  civilizations,  she  feels  called  to 
the  national  mission  of  propagating  the  newly  har- 
monized culture  in  the  Orient,  especially  in  China.  Here 
is  Marquis  Okuma's  own  statement : 

"I  have  no  doubt  that  Japan  will  propagate  to  China 
and  other  countries  in  the  Orient  whose  standard  of 
civilization  is  low,  her  new  civilization,  which  is  a  prod- 
uct of  harmonizing  the  Japanese  and  European  civiliza- 
tions. In  a  sense,  Japan  may  be  said  to  have  the  mission 
of  harmonizing  Eastern  and  Western  civilization  and  of 
propagating  the  new  civilization.  Nay,  I  do  not  hesitate 
to  declare  that  this  is  her  mission."  M 

To  this  end,  by  Articles  2  and  7  of  Group  V  of  the  Orig- 
inal Demands,20  she  demanded  the  right  of  owning  land 
in  the  interior  of  China  for  the  use  of  Japanese  hospitals, 
churches  and  schools,  and  also  that  of  missionary  propa- 
ganda in  China,  both  of  which  were  not  granted  however. 

The  last  phase  of  Japan's  policy  of  paramount  influ- 
ence is  her  claim  to  special  interests  in  China.  The 
Lansing-Ishii  agreement  recognizes  this.30  While  it  is 
reasonably  certain  that  Mr.  Lansing  did  not  recognize 
Japan's  special  interests  in  China  any  more-  than  he  did 
the  special  interests  of  the  United  States  in  Canada  or 
Mexico,'11  Japan's  interpretation,  however,  is  neverthe- 
less different.  It  tends  to  favor  the  construction  of  a  posi- 
tion of  paramount  influence.  The  testimony  of  S 
tary  Lansing  before  the  Senate  Committee  on  Foreign 
Relations  Eurn  dencethal  Viscount  tshii  attempted 

to  put  the  construction  of  this  influence  on  the  term 
"special  interest"  dining  the  negotiatic 

"Senator  Borah.     He  (Ishii)  said  that  bis  idea  was 

that  Japan   had   special    interests    in    China    which    right 


226       THE  TOLICY  OF  JAPAN  IN  CHINA 

was  to  be  recognized,  and  by  those  special  interests  he 
mean  paramount  control? 

I  arv   LANSING.     Yes;  and  I   told  him   1  could 
not  consider  it. 

"Senator  Brandagee.33  Did  he  at  any  time  intimate 
that  it  meant  paramountcy  or  interest  different  from  that 
of  any  other  nation,  other  than  from  Japan's  propin- 
quity to  China? 

"Secretary  Lansing.  My  only  recollection  as  to  that 
is  that  he  wished  to  have  inserted  the  words  'special  in- 
terests and  influence'  and  1  objected  seriously  to  the 
insertion  of  the  words  'and  influence,'  and  they  were 
stricken  out." 

Besides  Mr.  Lansing's  testimony,  the  letter  of  the  Rus- 
sian Ambassador  at  Tokio  of  that  time  again  revealed 
the  Japanese  intention  to  interpret  "special  interest"  as 
paramount  influence. 

"The  Japanese  are  manifesting  more  and  more  clearly 
a  tendency  to  interpret  the  special  position  of  Japan  in 
China,  inter  alia,  in  the  sense  that  other  Powers  must 
not  undertake  in  China  any  political  steps  without  pre- 
viously exchanging  views  with  Japan  on  the  subject — 
a  condition  that  would  to  some  extent  establish  a  Japa- 
nese control  over  the  foreign  affairs  of  China."34'35 

"To  my  question  whether  he  did  not  fear  that  in  the 
future,  misunderstandings  mighl  arise  from  the  different 
interpretations  by  Japan  and  the  United  States  of  the 
meaning  of  the  terms  'special  position'  and  'special  inter- 
of  Japan  in  China,  VlSCOUnl  Motono  replied  by 
saying  that — (a  gap  in  the  original).     Nevertheli     .    I 

gain  the  impression  from  the  words  of  the  minister  that 

he  is  conscious  of  the  possibility  of  misunderstandings 

also  in  the  future,  hut  is  of  the  opinion  that  in  such  a  case 
Japan  would  have  better  means  at  her  disposal  fur  car- 
rying   into    effed    her    interpretation    than    the    United 

States."80 


POLICY  OF  PARAMOUNT  INFLUENCE     227 

Again,  commenting  on  the  interpretation  of  the 
Lansing-Ishii  agreement,  a  Japanese  author  frankly 
asserted  that  what  Secretary  Lansing  conceded  was  the 
recognition  of  Japan's  paramount  influence  in  certain 
sections  of  China  as  long  as  the  exercise  of  that  influ- 
ence did  not  conflict  with  the  principles  of  the  Open  Door 
doctrine. 

"The  understanding  was  concluded  in  flexible  terms 
permitting  of  various  interpretations.  But  if  we  may 
gauge  the  official  sentiment  at  Washington  through  the 
press  dispatches  from  the  capital  at  the  time  the  under- 
standing was  consummated,  the  American  Government 
was  prepared  to  go  a  long  way  towards  the  establish- 
ment of  the  principle  that  Japan  was  entitled  to  secure 
a  paramount  influence  in  certain  sections  in  China,  as 
long  as  she  does  not  encroach  upon  the  "Open  Door  prin- 
ciple." 37 

Moreover.  Japan's  subsequent  actions  show  her  inten- 
tion of  interpreting  special  interests  as  paramount  influ- 
ence. She  established  civil  administration  in  Shantung, 
where  for  almost  three  years,  since  her  capture  of  Tsing- 
tau,  she  had  been  contented  with  merely  maintaining 
military  occupation.  She  also  extended  her  civil  regime 
in  Manchuria.  Note  this  testimony  before  the  Senate 
Committee  on  Foreign  Relations  : 3H 

"Moreover,  Japan  went  ahead  and  acted  on  her  in- 
terpretation. From  that  time  she  assumed  a  position  of 
paramountcy  in  relation   to  China.     She  went  ahead  and 

began  the  establishment  of  civil  government  over  Shan- 
tung   Province.     She    extended    her    civil    government 

regime    in    .Manchuria.      She    began    actually    to    acquire 

the  p  i-  and  the  position  of  a  sovereign  in  most 

parts  of  China  where  she  had  obtained  a   foothold  by 

the    method     1     have    indicated.      She    went    <>n.    and    she 

obtained,   through   that   influence,   a   great    influent 
Peking.  .  .  ." 


228       THE  POLICY  OF  JAPAN  IN  CHINA 

Furthermore,  in  December,  1917,  shortly  after  the 
Bolshevist  coup  d't'tal,  the  Japanese  Government  offered 
in  a  note  to  the  Allied  Powers  and  the  United  States, 
to  intervene  in  Siberia,  on  three  conditions,  one  of  which 
was  that  the  Allied  nations  and  the  United  States  should 
recognize  her  paramount  position  in  China  and  the  ex- 
isting Sino-Japanese  treaties.80  In  the  alleged  secret 
Treaty  of  Alliance  between  Japan  and  Germany,  pur- 
porting to  have  been  negotiated  at  Stockholm,  in  Octo- 
ber, 1918,  by  the  German  Ambassador  Lucius  and  Mr. 
Oda,  the  Plenipotentiary  of  Japan, — which  was  however 
nullified  by  the  German  Revolution, — it  was  provided  that 
while  Germany  was  to  receive  Japan's  support  in  estab- 
lishing her  paramountcy  over  European  Russia  and 
Western  and  Central  Siberia,  Japan  was  to  be  given 
assistance  in  establishing  her  paramount  influence  in  East- 
ern Siberia  and  China.40 


NOTES  TO  CHAPTER  XIII 

1.  Kawakami,  Japan  in  World  Politics,  p.  129. 

2,  3.    Kawakami.   lapan  and  World  Peace,  pp.  161-162. 

4.  MacMurray,  1905/18 ;  W.  W.  Willoughby,  Foreign  Rights 
and  Interests  in  China,  p,  313. 

5.  6.  The  Sino-Japanese  Negotiations,  1915,  p.  19;  MacMurray, 
1915/8;  Sino-Japanese  Negotiations,  p.  4°  et  seq. 

7.  MacMurray,  1915/8;  Sino-Japanese  Negotiations,  1915,  p. 
55  ct  seq. 

8.  The  Sino-Japanese  Negotiations,  1915,,  p.  22. 

9.  Ibid.,  pp.  69-70. 

10.  V'ida  supra,  chapter  on  the  Policy  of  Economic  Ex- 
ploitation. 

11.  The  Sino-Japanese  Negotiations,  1915,  p.  22. 

12.  Ibid.,  pp.  10-11. 

13.  Millard's  Review,  May  1,  1920,  p.  445  et  Beq.,  the  resolu- 
tion of  the  inter-allied  technical  board. 

14.  IS.  Millard'.,  Review,  May  22,  1920,  p.  574;  this  is  what 
is  charged  in  an  official  dispatch  received  by  the  Peking  Govern- 
ment from  the  civil  Government  of  Kirin:  "It  is  an  open  secret 
that  large  numbers  of  bandit  leaders  have  been  invited  to 
Tsingtao  where  they  have  been  trained  and  armed  for  the  pur- 
i  e  of  molesting  the  inhabitants  in  the  neighboring  districts  and 
thereby  making  it  impossible  for  the   Chinese  to  continue  their 


POLICY  OF  PARAMOUNT  INFLUENCE     229 

peaceful  vocations.  According  to  most  reliable  reports,  several 
Japanese  brought  with  them  to  this  province  notorious  robbers. 
.  .  .  These  ringleaders  and  their  Japanese  friends  have  been 
distributed  at  various  points  along  the  Chinese  Eastern  Railway 
where  they  intend  to  create  trouble.   ..." 

16.  In  a  further  attempt  to  control  the  railway  she  offered  the 
Russian  committee  military  support  i  n  several  conditions,  among 
which  was  the  one  that  any  further  financial  needs  of  the  Chinese 
Eastern  Railway  were  to  be  the  first  submitted  to  Japan — 
Millard,  Democracy  and  the  Eastern  Question,  p.  307. 

17,  18.  H.  K.  Tong,  article  on  The  Inter-Allied  Watch  Dog 
of  the  Chinese  Eastern  Railway,  Millard's  Review,  June  26,  1920, 
p.  211  et  seq. 

19.  Poolev,  Japan's  Foreign  Policy,  p.  192. 

20.  MacMurray,  1898/2. 

21.  Hornbeck,  op.  cit.,  p.  264. 

22.  Ibid.,  p.  265  et  seq. 

23.  U.  S.  Commerce  Reports,  Feb.  20,  1915,  Report  of  Consul 
General  P.  S.  Heintzleman,  Dec.  21,  1914,  quoted  in  Hornbeck, 
Contemporary  Politics  in  the  Far  East,  p.  267. 

24.  Millard,  Democracv  and  the  Eastern  Question,  pp.  274-275. 

25.  Ibid.,  p.  275. 

26.  For  the  manipulation  of  Chinese  currency  in  Manchuria, 
see  H.  K.  Tong,  article  on  Driving  American  and  European 
Business  out  of  Manchuria,  Millard's  Review,  June  29.  1918, 
p.  168;  Violating  the  "Open  Door''  in  Manchuria,  Millard's  Re- 
view, July  20,  1918,  p.  294. 

27.  John  Spargo,  Russia  as  an  American  Problem,  pp.  254-255. 

28.  J.  O.  P.  Bland,  article  on  A  Goal  for  Japanese  Ambition, 
Asia,  February,  1921,  p.  147. 

29.  The  Sino-Japanese  Negotiations,  1915,  p.  22. 

30.  Hearings  before  the  Senate  Committee  on  Foreign  Rela- 
tions, Sixty-sixth  Congress,  First  Session,  Senate  Document  No. 
106,  on  the  Treaty  of  Peace  with  Germany,  p.  225. 

31.  Vide  infra,  chapter  on  the  Policy  of  Asiatic  Monroe  Doc- 
trine. 

32.  Hearings,  op.  cit..  p.  229  et  seq. 

33.  Ibid.,  p.  233, 

34.  35.  [bid.,  p.  230;  Millard,  Democracy  and  the  Eastern 
Question,  p.  14X;  Letter  of  Russian  Ambassador  at  Tokio,  Oct 
22,  1917. 

36.  M ilia !<!.  Democracy  and  the  Eastern  Question,  p.  14(>;  The 
Shantung  Question,  op.  cit,  p.  IS;  Etrupensfcy's  Third  Dispatch, 
Nov.  1.  1917. 

37.  Kawakami,  Japan  and  World  Peace,  p.  1 

Hearings,  op.  crt,  p.  444,  the  testimony  of  T.  F.  Millard. 

39.  [ohn  Spargo,  op.  cit.,  p.  236. 

40.  [bid.,  pp.  253  254. 


XIV 
THE  POLICY  OF  POLITICAL  CONTROL 

As  we  have  already  seen,  Japan's  whole  policy  turns 
to-day  on  two  fundamental  problems — the  problem  of  the 
increasing  population  of  Japan  and  the  question  ol  China, 
(hit  of  the  first  the  policy  of  economic  exploitation  and 
the  policy  of  territorial  expansion  developed,  manifesting 
partly  also  in  the  policy  of  paramount  influence.  Out  of 
the  second,  the  Chinese  question,  there  arose  her  policy 
of  paramount  influence  and  that  of  political  control  which 
constitutes  the  theme  of  our  present  chapter  and  the 
"Asiatic  Monroe  Doctrine"  which  will  be  discussed  in 
the  next  chapter. 

Japan's  policy  of  political  control  is  largely  an  out- 
growth of  existing  conditions  in  China.  Ever  since  the 
Chinese  Revolution  in  1911,  the  control  of  the  Central 
Government  has  relaxed  and  weakened,  and  the  provinces 
have  practically  become  independent  states.  Armies  are 
maintained  by  the  various  provinces,  over  which  the  Presi- 
dent has  little  control.  As  a  result,  the  provinces  can 
declare  their  independence,  almost  at  will.  Thus,  over 
the  issue  of  the  constitutionality  of  the  dissolution  of 
the  Parliament  in  1917,  the  provinces  split  into  North 
and  South.  Again,  taxes  arc,  in  the  main,  collected  by 
the  provinces,  which  can  refuse  to  remit  quotas  as  requi- 
sitioned. As  a  consequence,  the  provinces  fail  to  send 
remittances,  and  the  Central  Government  is  compelled  to 
live  on  loans.  As  it  does  not  enjoy  the  confidence  of 
the  people,  it  is  forced  to  resort  to  foreign  financial  aid. 
In  doing  so,  it  mortgages  one  asset  after  another,  th> 
placing  the  country  under  the  danger  of  foreclosure. 
Added  to  this  is  the  corruption  of  some  of  the  leading 

230 


POLICY  OF  POLITICAL  CONTROL       231 

officials  who  in  exchange  for  the  rich  commission  they 
can  gain  from  the  loans  passing  through  their  hands, 
do  not  hesitate  to  contract  foreign  loans,  regardless  of 
future  consequences.  Such  a  combination  of  situations — 
civil  war,  foreign  borrowing,  and  official  corruption — 
cannot  but  give  rise  to  the  apprehension  of  possible  bank- 
ruptcy and  Western  control. 

If  the  conditions  existing  in  China  were  free  from 
foreign  influences,  Japan  would  probably  have  been  less 
anxious.  As  it  is,  the  Western  Powers  have  made  China 
a  happy  hunting  ground  for  gaining  concessions  and  ex- 
ploiting natural  resources.  They  would  not  hesitate,  save 
for  the  rise  of  Chinese  nationalism,  to  make  the  country 
a  second  Africa  or  Egypt.  And  yet,  in  face  of  the  for- 
eign menace,  China  remains  divided,  incapable  of  resist- 
ing alien  aggression,  and  headed  toward  the  abyss  of 
bankruptcy  and  foreign  control.  To  the  mind  of  Japan, 
granting  the  continuance  of  existing  conditions,  and  pro- 
vided no  new  factors  of  salvation  arise,  foreign  control 
is  China's  well-nigh  inevitable  fate.  As  is  said,  "If  this 
unhappy  condition  is  permitted  to  continue  much  longer, 
the  outside  Powers  interested  in  China  will  sooner  or 
later  combine  their  influence  to  establish  international 
supervision  over  that  country."  1_2 

Besides,  had  China  been  located  far  away  and  had  she 
not  been  of  the  same  racial  and  linguistic  family,  Japan 
would  not  have  been  so  much  impelled  to  action.  As 
it  is,  China  is  situated  at  the  door  of  Japan  and  is  of 
the  same  family  in  race  and  language.  Should  China 
ever  pass  under  Western  control,  thus  losing  her  inde- 
pendent existence,  Japan  would  be  left  all  alone  in  the 
world — to  face  the  increasing  domination  of  the  West. 

What  is  worse.  Japan's  destiny  and  welfare  are  inti- 
mately related  to  those  of  China.    Japan  depends  upon 

her  for  the  Supply  Of  basic  materials,  particularly  coal, 
iron  and  Steel,   for  a  market    for  her  manufactured  prod- 

and  for  mutual  cooperation  against  the  \\ 


232       THE  POLICY  OF  JAPAN  IN  CHINA 

domination.  Should  China  fall.  Japan  would  undoubt- 
edly be  crippled.  "With  the  history  of  European  diplo- 
macy in  the  Near  and  Far  East  before  them,  the  Japa- 
nese cannot  but  shudder  at  the  thought  of  the  day  when 
China  shall  be  held  fast  in  the  grip  of  Western  Powers."  s 
To  Japan,  therefore,  the  Chinese  question  is  one  of 
life  and  death,  and  upon  its  proper  and  successful  solu- 
tion depends  her  future  prosperity  and  well-being : 

"For  many  years  to  come  Japan's  efforts  will  be  con- 
centrated upon  the  solution  of  the  Chinese  question. 
Whether  or  not  she  is  equal  to  the  task,  she  must  here 
make  supreme  efforts,  for  her  place  in  world  politics 
primarily  lies  in  the  molding  of  Asia's  destiny.  She  will 
urred  to  play  the  leading  role  in  the  disposition  of 
the  Chinese  situation,  not  from  any  motives  of  empire 
building,  but  from  the  necessity  of  self-preservation. 
Open  the  map  of  China,  and  mark  out  the  territories 
staked  out  by  various  European  Powers  as  their  spheres 
of  influence.  Then  you  will  begin  to  realize  why  the 
Japanese,  deep  in  their  heart,  still  cherish  the  fear  of  the 
Occident."  * 

For  this  reason,  Japan  would  not  hesitate  to  take  such 
measures  as  are  necessary  for  her  own  self  -preservation 
as  regards  China.  Consequently,  she  endeavors  to  fore- 
stall Western  control  by  Japanese  control. 

\  ide  from  existing  conditions  and  out  of  fear  of 
the  WCstern  control  of  China,  there  is  yet  another  vital 
reason  why  Japan  desires  to  attain  political  control,  and 
that  is  the  future  of  China  and  its  relation  to  herself. 
Should  China  be  partitioned,  Japan  would  again  he  iso- 
lated, and  have  to  face  the  West  alone.  If  she  should  be 
controlled  by  the  Western  Powers,  Japan  would  again 
the  economic  support  and  political  cooperation  which 
China  can  give  her.  If  China  should  remain  weak  and 
divided,  as  she  now  is,  Japan's  own  welfare  and  safety 
will  be  jeopardized  by  frequent  rebellions  and  insurrec- 


POLICY  OF  POLITICAL  CONTROL       233 

tions  and  possible  foreign  intervention.  If,  however, 
China  should  become  strong.  Japan  has  to  face  the  alter- 
native of  a  strong  and  friendly  China  or  a  strong  but 
hostile  China.  Frankly  speaking,  a  strong  and  hostile 
China,  possessing  ten  times  the  strength  of  Japan,  is 
the  last  choice  Japan  wishes  to  have  to  make.  On  the 
other  hand,  a  strong  and  friendly  China  would  be  diffi- 
cult to  secure.  Having  attained  her  own  status  of  inter- 
national equality  at  the  expense  of  China's  defeat,  and 
entertaining  territorial  designs  on  South  Manchuria  and 
Eastern  Inner  Mongolia,  she  is  quite  aware  of  the  pos- 
sible revenge  that  a  strong  China  is  likely  to  take.  Apart 
from  the  possibility  of  revenge,  the  rise  of  a  strong 
China,  granting  it  to  be  friendly,  is  bound  to  stand  in 
the  way  of  Japan's  territorial  expansion  and  to  over- 
shadow her  strength  and  importance.  It  would  prob- 
ably wrest  from  her  the  leadership  of  the  Orient,  which 
she  would  never  willingly  yield.  While  it  must  be  stated 
in  all  fairness  that  there  are  Japanese  who  believe  sin- 
cerely that  a  strong  and  friendly  China  is  the  best  pro- 
tection Japan  can  have,  there  is  an  overwhelming  ma- 
jority who  hold  to  a  contrary  opinion.  Prince  Yanmagata 
once  remarked :  "A  strong  Emperor  is  what  is  needed  to 
rejuvenate  China,  and  to  enable  her  to  surpass  Japan. 
Japan,  therefore,  does  not  want  a  strong  Emperor  in 
China.  Still  less  does  Japan  want  a  successful  republic 
there.  Japan  wants  a  weak  and  incapable  China;  and 
a  weak-  China  under  a  weak  Emperor,  subject  to  Japan's 
influence,  would  be  the  ideal  state."  B '' T  s    h  is,  therefore, 

fair  to  infer  that  Japan  does  not   wish  to  see  a  partition 

of  China,  nor  a  Western  control  of  China,  nor  a  strong 

China,  nor  a  hostile  China.     What  she  desires  is  her  own 

control  of  China.    Thai  is  her  ideal.     By  this  means  she 
can  not  only  forestall  Western  control,  but  also  safeguard 
her  own  future  againsl   China.     With  control  assured, 
she  can,  as  a  matter  of  course,  cany  out  at  will  tl.< 
of  her  policies  in  China — economic  exploitation,  territorial 


234       THE  POLICY  OF  JAPAN  IN  CHINA 

expansion,  paramount  influence  and  an  Asiatic  Monroe 
Doctrine. 

Much  more  than  as  a  measure  of  self-defense  against 
a  rising  China,  Japan  desires  to  control  the  former  coun- 
try so  as  to  use  her  as  an  instrument  for  what  may  be 
calkd  world  domination.  Japan  dreams  of  a  day  when 
she  will  rule  the  entire  Orient,  and  be  able  to  measure 
swords  with  the  West,  if  not  actually  to  dispute  Western 
superiority  and  domination.  While  this  dream  is  not 
entertained  by  all  Japanese,  it  is  nevertheless  the  ambi- 
tion of  some  of  them,  particularly  the  Jingoists.  A 
Japanese  Imperial  Pronouncement  written  in  the  autumn 
of  1916  contains  the  following:0 

"Fifty  million  of  our  race  wherewith  to  conquer  and 
possess  the  earth !  It  is  indeed  a  glorious  problem !  .  .  . 
To  begin  with,  we  new  have  China;  China  is  our  steed! 
Far  shall  we  ride  upon  her!  Even  as  Rome  rode  Latium 
to  conquer  Italy,  and  Italy  to  conquer  the  Mediterranean, 
even  as  Napoleon  rode  Italy  and  the  Rhenish  States  to 
conquer  Germany,  and  Germany  to  conquer  Europe; 
even  as  England  to-day  rides  her  colonies  and  her  so- 
called  "allies"  to  conquer  her  robust  rival — Germany — 
even  so  shall  we  ride  China.  So  become  our  50,000,000 
race  500,000,000  strong;  so  grow  our  paltry  hundreds  of 
millions  of  gold  into  billions  !  .  .  .  But  using  China  a^ 
our  steed,  should  our  first  goal  be  the  land?  India? 
or  the  Pacific,  the  sea  that  must  be  our  very  own.  even  as 
the  Atlantic  is  now  England's?  The  land  is  tempting 
and  easy,  but  withal  dangerous.  ...  It  must,  therefore, 
be  the  sea;  but  the  sea  means  the  Western  Americas  and 
all  the  islands  between  and  with  those  must  soon  come 
Australia,  India,  and  then  the  battling  for  the  balance  of 
world-power,  for  the  rest  of  North  America.  Once  that 
is  ours,  we  own  and  control  the  whole — a  domination 
worthy  of  our  race !" 

It  is,  therefore,  fair  to  conclude  that  certain  Japanese, 
especially  the  Jingoists,  entertain  the  dream  of  consoli- 


POLICY  OF  POLITICAL  CONTROL       235 

dating  the  yellow  race  under  the  banner  of  Dai  Nippon 
and  of  disputing  Western  domination,  at  least  in  the 
Orient,  through  the  instrumentality  of  a  subjugated  and 
enthralled  China. 

With  such  a  policy  determined  on,  she  waited  for  an 
opportunity  for  its  execution.  When  the  Powers  were 
present  in  China,  she  was  not  able  to  disclose  her 
desire.  When,  in  consequence  of  the  war,  the  Eu- 
ropeans retired,  the  opportunity  came,  which,  as  the 
Japanese  said,  would  "not  occur  again  for  hundreds 
of  years  to  come."  At  that  opportune  moment  the  Black 
Dragon  Society  appeared,  urging  the  Government  to  form 
a  defensive  alliance  with  China,  as  a  means  to  control 
her,  and  to  resist  the  post-bellum  Western  aggression. 
It  read  in  part: 

"It  is  a  very  important  matter  of  policy  whether  the 
Japanese  Government,  in  obedience  to  its  divine  mission, 
shall  solve  the  Chinese  Question  in  a  heroic  manner  by 
making  China  voluntarily  rely  upon  Japan.  To  force 
China  to  such  a  position  there  is  nothing  else  for  the 
Imperial  Japanese  Government  to  do  but  to  take  advan- 
tage of  the  present  opportunity  to  seize  the  reins  of  po- 
litical and  financial  power  and  to  enter  by  all  means  into 
a  defensive  alliance.  .  .  ." X1 

"From  date  of  the  signing  of  this  Defensive  Alliance, 
Japan  and  China  shall  work  together  hand  in  hand. 
Japan  will  assume  the  responsibility  of  safeguarding 
Chinese  territory  and  maintaining  the  peace  and  order  in 
China.  These  will  relieve  China  of  all  future  anxieties 
and  will  enable  her  to  proceed  energetically  with  her  re- 
forms, and.  with  a  sense  of  territorial  security,  she  may 
wait  for  her  national  development  and  regeneration 
Even  after  the  presenl  European  war  is  ever  and  i" 

■\r<\  China  will  absolutely  have  nothing  to  fear 
in  the  future  of  having  pr<  -  ure  brought  against  her  by 
tin-  foreign  Powers.  It  is  only  thus  that  permanent 
peace  can  be  secured  in  Far  East."  u 


236       THE  POLICY  OF  JAPAN  IN  CHINA 

Among  the  terms  set  forth  in  the  secret  alliance  are 
the  following,  which  relate  to  the  control  of  China.  When 
read  in  the  light  of  the  subsequent  Group  V  of  the 
Twenty-one  Demands,  no  impartial  mind  can  remain  un- 
convinced that  they  were  the  forerunners  of  these 
demands : 

"For  the  reorganization  of  the  Chinese  army  China 
shall  intrust  the  training  and  the  drilling  of  her  army  to 
Japan. 

"For  the  unification  of  China's  firearms  and  munitions 
of  war,  China  shall  adopt  firearms  of  Japanese  pattern 
and  at  the  same  time  establish  arsenals  (with  the  help 
of  Japan)  in  different  strategic  points. 

"With  the  ohject  of  creating  and  maintaining  a  Chinese 
navy,  China  shall  intrust  the  training  of  her  navy  to 
Japan. 

"With  the  object  of  reorganizing  her  finances  and  im- 
proving the  methods  of  taxation,  China  shall  intrust  the 
work  to  Japan,  and  the  latter  shall  elect  competent  finan- 
cial experts  who  shall  act  as  first-class  advisers  to  the 
Chinese  Government. 

"China  shall  first  consult  with  and  obtain  the  consent 
of  Japan  before  she  can  enter  into  an  agreement  with 
another  Power  for  making  loans,  the  leasing  of  territory, 
or  the  session  of  the  same."  13 

Upon  the  urge  of  this  memorandum  and  seizing  the 
opportunity  offered  by  the  World  War,  Japan  dropped 
the  mask,  disclosed  her  designs,  and  presented  the 
Twenty-one  Demands,  among  which  was  Group  V.  In 
the  formal  demands  as  presented,  it  will  he  noticed  that 
tlir  slt.-nt  terms  as  proposed  by  the  memorandum  of  the 
P. lack  Dragon  Society  have  been  carefully  reduced  to 
three  cogent  hut  all-inclusive  demands.  The  first  article 
required  that  "the  Chinese  Central  Governmenl  shall  em- 
ploy influential  Japanese  a.-  advisers  in  political,  financial 
and  military  affairs."  14  This  would  cover  the  control 
of  the  Chinese  army  and  navy,  finance  and  the  foreign 


POLICY  OF  POLITICAL  CONTROL       237 

relations ;  in  short,  the  administration  of  the  Peking  Gov- 
ernment. Had  this  been  granted,  the  Japanese  would 
have  dominated  the  Peking  Government,  and  as  the 
memorandum  of  the  Black  Dragon  Society  put  it,  seized 
"the  reins  of  political  and  financial  power."  Although 
the  defense  might  be  made  that  the  numerous  Japanese 
advisers  to  be  employed  would  not  necessarily  be  given 
executive  power,  the  danger  would  nevertheless  be  pres- 
ent that  the  employment  of  so  many  of  them  would 
mean  the  domination  of  the  Peking  Government  by  the 
Japanese  influence,  and,  what  is  worse,  could  easily 
serve  as  a  prelude  to  her  eventual  seizure  of  the  reins 
of  power. 

The  third  article  of  Group  V  demanded  the  joint  admin- 
istration of  police,  in  "important  places"  in  China,  or 
the  employment  of  numerous  Japanese  in  the  police 
departments  of  these  places.  As  the  police  power  is 
a  concrete  symbol  of  sovereignty,  the  grant  of  this  de- 
mand would  be  tantamount  to  the  transfer  of  China's 
sovereignty  to  Japan.  Although  during  the  negotiation  it 
was  disclosed  that  the  Japanese  Government  meant  to 
apply  the  police  power  only  to  South  Manchuria,10  the 
language  of  the  demand  was  nevertheless  so  general  as 
to  include  important  places  in  China,  irrespective  of  their 
location,  and  extending  throughout  the  Republic,  thus 
giving  rise  to  the  peril  of  an  indefinite  extension  of  the 
Japanese  police  power  throughout  the  length  and  breadth 
of  China. 

Article  4  of  Group  V  demanded  that  "China  shall  pur- 
chase from  Japan  a  fixed  amount  of  munitions  of  war 
(say  fifty  per  cent  or  more)  of  what  is  needed  by  the 
Chinese  Government  or  that  there  shall  be  established 
in  China  a  Sino-Japanese  jointly-worked  arsenal.  Japa- 
nese technical  experts  are  to  be  employed  and  Japanese 
material  to  be  purchased."  10  It  is  to  be  observed  that 
this  demand  corresponded  closely  to  the  original  secret 
specification,  as  set  forth  by  the  Black  Dragon  Society, 


238       THE  POLICY  OF  JAPAN  IN  CHINA 

of  unifying  China's  firearms  and  munitions  of  war  ac- 
cording to  the  Japanese  pattern  and  of  establishing  Sino- 
Japanese  arsenals  at  different  strategic  points  of  China; 
and  that  its  grant  would  have  meant  the  Japanization 
of  the  Chinese  army  and  the  consequent  control  thereof 
by  Japan.  While  this  might  shield  China  temporarily 
from  European  aggression,  it  would  nevertheless  deprive 
her  of  the  means  of  defense  against  the  encroachments 
of  Japan.  Thus,  had  all  these  demands  been  granted, 
the  independence  of  China  would  have  become  a  thing 
of  the  past. 

Significant  as  these  demands  were,  Japan  had,  as  is 
well  known,  to  withdraw  Group  V  excepting  the  clause 
respecting  Fukien,  largely  because  of  the  stubborn  re- 
sistance of  the  whole  Chinese  nation  and  of  the  oppo- 
sition of  Great  Britain  and  the  United  States.  In  the 
ultimatum,  however,  Japan  reserved  the  right  to  discuss 
Group  V  separately  in  subsequent  negotiations.17  Mean- 
while, the  Japanese  representative  insisted  "that  the 
Chinese  Government  should  specifically  state  in  their 
reply  to  the  ultimatum  that  Group  V  had  been  'postponed 
for  later  negotiation.'  " 18  It  is  to  be  observed  that  this 
reservation  clearly  proved  that  Japan  did  not  give  up 
the  policy  of  political  control  by  detaching  Group  V 
from  the  ultimatum,  but  that  Japan  did  intend  either  to 
bring  it  up  for  future  discussion  or  to  resort  to  other 
means  to  attain  the  end,  which  was  fully  borne  out  by 
the  subsequent  moves  of  Japan.  Hence  the  statement 
of  the  Chinese  Government:  ".  .  .  Since  the  date  of  the 
ultimatum,  Japanese  policy  in  China  appears  to  be  ex- 
pressing itself  in  terms  of  specific  principles  worked  out 
in  these  demands  in  Group  V  'postponed  for  later  nego- 
tiation.' "  " 

Failing  in  this  direct  assault  through  diplomatic  chan- 
nels, upon  the  change  in  the  cabinet  from  Okuma  to 
Terauchi,  Japan  modified  the  method  of  attack.     She 


POLICY  OF  POLITICAL  CONTROL       239 

adopted  the  indirect  method  of  loans  and  an  alliance  with 
the  pro-Japanese  clique  in  the  Peking  Government,  as  a 
pathway  to  the  control  of  China.  From  1915, — the  year 
of  the  Twenty-one  Demands, — to  October  25,  1918,  Japan 
loaned  to  China  no  less  than  a  total  of  from  200,000,000 
yen  to  391,430,000,  varying  in  amount,  of  course,  accord- 
ing to  the  authenticity  of  the  reported  loans.  According 
to  the  estimate  of  T.  F.  Millard,20  while  Japan  has  loaned 
to  China  from  January  1,  1909,  to  the  World  War  only 
17,670,000  yen,  and  to  the  Hanyehping  32,000,000  yen, 
she  loaned  to  the  Chinese  Government,  from  August, 
1914,  to  October  25,  1918,  no  less  than  391,450,000  yen, 
— almost  eight  times  as  much  as  the  pre-war  loans.  De- 
ducting the  unconfirmed  and  other  loans  susceptible  of 
doubt,  a  safe  and  conservative  estimate  would  be  from 
200,000,000  to  250,000,000  yen. 

In  addition  to  the  loans,  Japan  also  tried  to  control 
the  Chinese  army,  which  was  one  of  the  primary  objec- 
tives of  Group  V.  Under  the  name  of  the  War  Par- 
ticipation Board,  ostensibly  organized  for  effective  par- 
ticipation on  the  part  of  China  in  the  European  War,  but 
in  reality  for  strengthening  the  northern  military  party 
against  the  South,  a  new  army  of  about  50,000  men  was 
created.  General  Aoki  and  about  twenty-five  other  gen- 
erals assisted  in  the  organization  of  this  force.  General 
Saito  of  the  Japanese  army,  a  military  attache  of  the 
Japanese  Legation  in  Peking,  had  an  office  in  the  War 
Participation  Board  and  advised  on  all  questions.21 
Japan  also  supplied  all  the  money,  officers  and  ammuni- 
tions. 

The  motive  of  Japan's  activities  in  the  sale  of  arms 
and  other  military  supplies  was  indirectly  revealed  as 
follows :  '- 


"In  reply  to  my  question  as  to  the  credibility  of  the 
rumors  alleging  that  Japan  ia  prepared  to  sell  to  the 
Chinese  Government  a  considerable  quantity  of  arms  and 


240       THE  POLICY  OF  JAPAN  IN  CHINA 

munitions,  Viscount  Motono  (then  Japanese  minister  of 
foreign  affairs)  confirmed  them,  and  added  that  the 
Peking  Government  had  promised  not  to  use  the  arms 

against  the  Southerners.  It  was  evident  from  the  min- 
ister's words,  however,  that  this  promise  possessed  only 
the  value  of  a  formal  justification  of  this  sale,  infringing 
as  the  latter  does  the  principle  of  non-intervention  in  the 
internal  Chinese  feuds,  proclaimed  by  Japan  herself.  .  .  . 
It  is  most  likely  that  the  Japanese  are  aiming  principally 
at  obtaining  the  privilege  of  rearming  the  entire  Chinese 
army,  and  making  China  dependent  in  the  future  on  Jap- 
anese arsenals  and  the  supply  of  munitions  from  Japan. 
The  arms  to  be  supplied  are  estimated  at  30,000,000  yen. 
At  the  same  time,  Japan  intends  establishing  an  arsenal 
in  China  for  the  manufacturing  of  war  materials."23 

Aside  from  the  control  of  her  army.  Japan  likewise 
attempted  to  control  the  currency  of  China.  In  1918, 
her  agents  proposed  to  reform  the  currency  by  the  adop- 
tion of  a  gold  standard.  The  plan  was  to  issue  gold  notes 
on  the  reserve  of  80,000,000  yen  of  bank  notes  to  be  bor- 
rowed from  Japan,  which,  in  turn,  were  to  be  secured  by 
the  gold  reserve  in  Japan.  In  accordance  with  this  plan, 
China  was  thus  to  have  a  gold  standard  currency  with- 
out any  gold  reserve  of  her  own,  but  based  on  Japan's 
gold  reserve.24  Had  this  scheme  been  adopted,  her  cur- 
rency would  have  been  under  the  control  of  Japan.  This 
would  have  especially  been  so  should  there  have  been 
a  war  between  Japan  and  China,  in  which  event  Japan 
could  cut  off  the  support  of  the  gold  reserve  and  thus 
throw  China  into  financial  disorder. 

When  the  Great  War  ended  and  the  European  Powers 
were  ready  to  return  to  China,  Japan,  perceiving  the 
disapproval  of  the  Powers  as  to  her  attempt  to  assume 
control  of  that  country,  once  more  put  on  her  mask  and 
resumed  the  pre-war  policy  of  international  cooperation. 
Hara,  having  succeeded  to  Terauchi  as  Prime  Minister, 


POLICY  OF  POLITICAL  CONTROL       241 

immediately  reversed  the  policy  of  irresponsible  loaning 
and  put  an  effective  injunction  on  further  loans  to  China 
pending  the  unification  of  the  North  and  the  South.25 

Meanwhile,  at  the  Taris  Peace  Conference,  the  New 
International  Banking  Consortium  came  to  birth ;  and 
that  effectively  neutralized  the  Japanese  efforts  to  gain  the 
control  of  China. 


NOTES  TO  CHAPTER  XIV 

1.  K.  K.  Kawakami,  Japan  and  World  Peace,  p.  111. 

2.  Cf.  ibid.,  p.  171. 

3.  Ibid.,  p.  172. 

4.  Kawakami,  Japan  in  World  Politics,  p.  12. 

5.  Millard,  Our  Eastern  Question,  p.  168. 

6.  Cf.  Millard.  Democracy  and  tbe  Eastern  Question,  p.  99. 

7.  Cf.  The  Remarks  of  Adacbi  Kunnosukc,  quoted  in  Stod- 
dard, Tbe  Rising  Tide  of  the  Color,  p.  26. 

8.  Cf.  Millard's  Review.  Aug.  9,  1919,  p.  388 ;  H.  K.  Tong, 
How  Japan's  Policy  Is  Undermining  Her  Position  in  Cbina. 

Military    Historian    and    Economist,   January    17,    1916,   pp. 
quoted  in   Stoddard,   The  Rising  Tide  of  the  Color,   pp. 
50-53. 

10.  The  memorandum  of  the  Black  Dragon  Society,  Putnam 
Weak,  The  Fight  for  the  Republic  in  China,  p.  128. 

11.  Ibid.,  p.  130. 

12.  Ibid.,  pp.  131-132. 

13.  Ibid.,  p.  131. 

14.  The  Sino- Japanese  Negotiations,  1915,  p.  2_\ 

15.  Ibid.,  p.  10. 

16.  Ibid.,  p.  11. 

17.  Ibid.,  p.  42. 

18.  The  Shantung  Question,  presented  bj  China  to  the  Paris 
Peace  i  published  bj  the  Chinese  National  Welfare 
Society.  March,  1920,  p.  13. 

19.  sticm,  p,  13. 

20.  For  a  full  list  of  the  leans  made,  <>r  reported  t"  hav< 
made,  by  Japan  t<>  China  from  January  1,  1919,  to  October  25. 
1918,  see  Millard,  1  >•  and  tin    Eastern  Question,  pp.  187- 
192. 

21.  Millard,  Democracy  and  tin-  Eastern  Question,  p.  179. 
The  Shantung  Question,  op.  cit,  pp.  13  14,  the  letter  of  M. 

Krupensky,  Russian  Vmba  ador  at  Tokio,  dated  Od  16,  1919, 
as  published  by  the  Russian  Revolutionary  Government,  Nov.  11, 
1917. 

For  a  full   description   of   Japan'-   activities  during  this 


242       THE  POLICY  OF  JAPAN  IN  CHINA 

period    see    chapter    on    the    Corruption    of    a    Nation,    Millard, 
Democracy  and  the  Eastern  Question,  p.  174  et  seq. 

24.  Far  Eastern  Review,  Sept,  1918,  p.  382,  Plans  for  Gold 
Currency  in  China. 

25.  Kawakami,  Japan  and  the  World  Peace,  pp.  190-191. 


XV 

THE  "ASIATIC"  MONROE  DOCTRINE 

The  policy  of  an  "Asiatic"  Monroe  Doctrine  is  actu- 
ated by  Japan's  desire  to  preserve  the  territorial  integrity 
and  political  independence  of  China.  She  feels  that  she 
is  a  close  relative  of  China  and  therefore  her  logical  and 
natural  guardian.  Casting  her  eyes  far  and  wide,  she 
finds  European  dominance  has  planted  its  flags  over 
Africa  and  carved  the  Dark  Continent  into  regions  of 
rule  and  exploitation.  Coining  nearer  home,  she  finds 
that  European  domination  has  extended  over  the  whole 
of  Asia  with  the  possible  exception  of  China  and  herself. 
Even  at  her  own  doors  she  finds  China's  independence 
already  partially  surrendered,  with  her  immediate  out- 
look pointing  to  bankruptcy  and  eventual  foreign  con- 
trol. Yet,  once  again  casting  her  glance  to  the  West, 
she  sees  the  Latin-American  Republics  enjoying  inde- 
pendence and  territorial  integrity  unmolested  and  un- 
hampered, and  that  this  is  due  to  the  protecting  wing  of 
the  American  Monroe  Doctrine,  which  holds  European 
aggression  at  arm's  length.  Thus,  surveying  the  world 
situation,  Japan  reaches  the  conclusion  that  the  only  way 
to  preserve  China  is  to  follow  the  example  of  America 
and  declare  a  doctrine  similar  to  the  Monroe  Doctrine  for 
Eastern  Asia,  if  not  for  the  whole  Orient. 

In  addition,  Japan  feels  the  call  of  a  national  mission. 
By  the  RtlSSO  e  War,  in  which  an  Oriental  state 

vanquished  a  Western  Power,  and  a  yellow  people  suc- 

ully  demonstrated  their  skill  in  warfare,  she  unwit- 
tingly asserted  the  principle  of  racial  equality.  She  there- 
fore feels  called  to  champion  t!  of  her  Subjugated 
neighbors  and  to  deliver  the  struggling  peoples  from  the 

2-13 


244       THE  POLICY  OF  JAPAN  IN  CHINA 

grip  of  Western  domination.  She  consequently  entertains 
the  noble  and  exalted  resolve  to  maintain  the  independ- 
ence of  whatever  nations  in  Asia  that  are  still  independ- 
ent, or  that  may  achieve  independence  in  the  course  of 
time,  and  to  recover  the  lost  rights  of  the  weaker  nations 
of  Asia. 

".  .  .  What  we  want  is  simply  that  we  become  inde- 
pendent of  the  whites  or  free  yellows  of  the  rampancy  of 
the  whites.  .  .  . 

".  .  .  The  Asiatic  Monroe  Doctrine  is  the  principle  of 
Eastern  Autonomy,  that  is,  of  Orientals  dealing  with 
Eastern  questions. 

".  .  .  It  is  incumbent  upon  the  Yamato  race  to  try  to 
recover  for  the  weaker  nations  of  the  East  their  rights, 
which  have  been  trampled  underfoot  by  other  powers."  w 

Thus  conceiving  her  mission,  Japan  waited  for  an  op- 
portunity to  proclaim  her  newly  adopted  Asiatic  Monroe 
Doctrine.  Before  the  Great  War  she  dared  not  assert 
it,  for  fear  of  the  relative  insufficiency  of  her  power  when 
pitted  against  a  combination  of  Western  nations.  With 
the  coming  of  the  great  struggle,  she  seized  the  oppor- 
tunity and  boldly  announced  her  policy.  In  the  Twenty- 
one  Demands,  she  stipulated  that  "the  Chinese  Govern- 
ment engages  not  to  cede  or  lease  to  a  third  Power  any 
harbor  or  bay  or  island  along  the  coast  of  China" 
(Group  4).:t  This  was  finally  changed  to  a  voluntary 
pronouncement  by  China  that  "no  bay,  harbor,  or  island 
along  the  coast  of  China  may  be  ceded  or  leased  to 
any  Power."4  Thus,  she  successfully  asserted  the  doc- 
trine that  hereafter  the  coast  of  China  would  not  be  open 
to  any  further  European  aggression.  Further,  she  pro- 
hibited China  from  employing  foreign  capital,  or  from 
granting  permission  to  foreign  states  or  intere  is  to  work 
mines,  build  railways,  and  construct  harbor  works   (in- 


THE  "ASIATIC"  MONROE  DOCTRINE    245 

eluding  dock-yards)  in  the  Province  of  Fukien  (Group 
V,  Article  6).M  Thus,  once  more,  Japan  successfully 
asserted  the  principle  that  Japan  would  not  permit  any 
alien  military  or  naval  establishment  in  Fukien  to  menace 
her  own  position  in  Formosa. 

Having  thus  pledged  China  to  the  observance  of  the 
"Asiatic"  Monroe  Doctrine,  she  again  waited  for  a  chance 
to  proclaim  it  to  the  Western  Powers,  and  if  possible, 
to  secure  its  recognition  by  formal  international  agree- 
ments. The  opportunity  came  when  Mr.  Wilson  sent 
a  note  of  friendly  advice  in  June,  1917,  counseling  the 
Chinese  people  to  compose  their  differences  and  to  con- 
struct a  central,  responsible  and  united  government. 
Japan  immediately  took  offense  at  the  direct  presenta- 
tion of  the  note  without  being  first  consulted.  She 
claimed  that  Japan  enjoyed  a  special  position  in  relation 
to  China  and  that  whatever  advice  was  to  be  given  her 
should  be  given  through  Tokio  or  with  her  concurrence 
or  approval.  Just  as  the  United  States  enjoys  a  special 
position  with  regard  to  Mexico,  so  Japan  claimed  similar 
special  interest  in  China.  Commenting  on  this  fact, 
the  Yamato  of  Tokio  said:  "Moreover,  America  must  be 
aware  of  the  superior  position  enjoyed  by  America  in 
Mexico.  Yet  while  Japan  has  abstained  from  taking  any 
step  whatever  in  Mexico,  in  deference  to  America's  spe- 
cial position  there,  America  has  interfered  in  China's 
domestic  politics  by  ignoring  Japan's  position  there."  7 

Taking  advantage  of  the  opportunity  afforded  by  the 
Wilson  note  and  emulating  the  example  of  other  Powers 
in  sending  War  Missions  to  the  United  States,  the  Japa- 
nese Government  ent  a  on  to  America  under 
the  leadership  of  Viscounl  [shii.  Prior  to  the  arrival 
of  the  [shii  mission,  a  confidential  report  reached  the 
rtmenl  of  State,  which  clearly  heralded  the  inten- 
tion and  purpose  of  the  mission:  "Japan  has  no  ulte- 
rior motives  in  respect  to  the  integrity  of  China;  that 
she  adheres  to  her  Open  Door  pledges;  that  nothing  Mil>- 


246       THE  POLICY  OF  JAPAN  IN  CHINA 

versive  of  China's  integrity  is  contemplated;  that  Japan's 
sole  object  is,  by  means  entirely  pacific,  to  bring  order 
out  of  chaos  in  China  with  no  special  privileges  in  view; 
that  Japan  understands  China  better  than  any  other  na- 
tion, and  owing  to  her  geographical  proximity  and  special 
political  position  and  interests  in  the  Far  East,  she  should, 
therefore,  when  essential,  take  the  leading  role  in  dealing 
with  China  as  the  United  States  does  with  the  nations 
of  the  Western  Hemisphere."  8  Thus,  the  ostensible  pur- 
pose of  the  mission,  as  it  related  to  China,  was  to  seek 
recognition  from  the  United  States  of  a  similar  position 
for  Japan  in  the  Orient  as  she,  herself,  enjoyed  in  the 
Western  Hemisphere. 

After  the  landing  of  the  Japanese  Mission,  in  August, 
1917,  and  while  the  negotiation  was  in  session,  Viscount 
Ishii  openly  announced  the  Asiatic  Monroe  Doctrine  in 
a  speech  delivered  in  New  York,  September  29,  1917,  and 
again  amplified  it  in  another  speech  made  in  the  same 
city,  October  1,  1917,  which  constituted  the  first  official 
pronouncement  of  the  Japanese  "Asiatic"  Monroe  Doc- 
trine.   We  quote  extracts  from  his  addresses : 

"\\  e  wish  to  be,  and  to  always  continue  to  be,  the 
sincere  friend  and  helper  of  our  neighbor,  for  we  are 
more  interested  than  any  one  else  except  China  in  good 
government  there,  and  we  must  at  all  times  for  self- 
protection  prevent  other  nations  from  doing  what  we  have 
no  right  to  do.  Not  only  will  we  not  seek  to  assail  the 
integrity  or  the  sovereignty  of  China,  bin  we  will  eventu- 
ally be  prepared  to  depend  and  maintain  the  same  in- 
tegrity and  independence  of  China  against  any  aggressor. 
For  we  know  that  our  own  landmarks  would  be  threat- 
ened by  any  outside  invasion  or  interference  in  China."8 

"In  a  speech  delivered  on  Saturday  night  I  made  par- 
ticular reference  to  the  policy  of  Japan  with  regard  to 
China.  This  reference  took  the  form  of  a  repetition  of 
the  pledge  and  promise  that  Japan  would  not  violate  the 
political  independence  or  territorial  integrity  of  China ; 


THE  "ASIATIC"  MONROE  DOCTRINE    247 

would  at  all  times  regard  the  high  principle  of  Open 
Door  and  equal  opportunity.  Now  I  find  that  this  utter- 
ance of  mine  is  taken  as  the  enunciation  of  a  'Monroe 
Doctrine  in  Asia.'  I  want  to  make  it  very  clear  to  you 
that  the  application  of  the  term  'Monroe  Doctrine'  to 
this  policy  and  principle,  voluntarily  outlined  and  pledged 
by  me,  is  inaccurate." 

"There  is  this  fundamental  difference  between  the 
'Monroe  Doctrine'  of  the  United  States  as  to  Central 
and  South  America  and  the  enunciation  of  Japan's  atti- 
tude toward  China.  In  the  first  place,  there  is  on  the 
part  of  the  United  States  no  engagement  or  promise, 
while  in  the  other  Japan  voluntarily  announces  that  Japan 
will  herself  engage  not  to  violate  the  political  or  terri- 
torial integrity  of  her  neighbor,  and  to  observe  the  prin- 
ciple of  the  Open  Door  and  equal  opportunity,  asking 
at  the  same  time  other  nations  to  respect  these  princi- 
ples." 10 

Thus,  Viscount  Ishii,  as  official  spokesman  of  Japan, 
announced,  in  essence,  that  his  country  would  respect  the 
territorial  integrity  and  political  independence  of  China 
and  would  eventually  be  prepared  to  defend  the  same. 
He  also  pointed  out  the  difference  between  the  American 
Monroe  Doctrine  and  Japan's  doctrine  in  that  the  United 
States  did  not  pledge  abstention  or  protection,  while 
Japan  voluntarily  engaged  not  to  violate  the  sovereignty 
and  integrity  of  China,  while,  at  the  same  time,  asking 
the  other  Powers  to  do  likewise.  While  Ishii  did  not 
definitely  brand  the  doctrine  as  "Asiatic"  Monroe  Doc- 
trine, the  principles  he  enunciated  were  such  as  to  con- 
stitute a  real  "Asiatic"  Monroe  Doctrine — that  is,  Japan 
undertook  not  to  violate  the  sovereignty  and  integrity  of 
China,  nor  permit  other  nations  to  do  so. 

Mr.  Lansing's  statements  further  substantiate  what 
Viscount  Ishii  proclaimed  and  declared  it  to  be  nothing 


248       THE  POLICY  OF  JAPAN  IN  CHINA 

less  than  the  principles  of  an  Asiatic  Monroe  Doctrine. 
In  his  statement  to  the  press,  he  declared  that  the  agree- 
ment introduced  a  new  principle — that  i-.  the  principle 
of  non-intervention,  which  is  the  cardinal  principle  of 
the  American  Monroe  Doctrine."  In  his  statement  to 
the  Chinese  Government.  Mr.  Lansing  reiterati  !  the  sig- 
nificance of  the  introduction  and  recognition  of  the 
principle  of  non-interference.1-  His  testimony  before 
the  Senate  Committee  on  Foreign  Relations  further 
strengthened  the  belief  that  the  special  interests  of  Japan 
which  he  recognized  in  China  were  not  different  from 
the  special  interests  of  the  United  States  in  Canada  or 
Mexico.  In  other  words,  he  recognized  Japan's  claim 
to  an  Asiatic  Monroe  Doctrine,  if  it  were  based  on  the 
same  principle : 

"Senator  Borah.  In  view  of  the  twenty-one  de- 
mands, what  construction  did  you  place  upon  the  ques- 
tion of  Japan's  special  interest  in  China? 

"SECRETARY  Lansing.  Only  the  special  interest  that 
comes  from  being  contiguous  to  another  country  whose 
peace  and  prosperity  wen-  involved. 

"Senator  Borah.  No  different  special  interest  from 
that  which  we  have  in  Canada? 

"Secretary  Lansing.     No. 

"Senator  Borah.     Or  which  we  have  in  Mexico? 

"Secretary  Lansing.     Exactly." 

Lansing  also  testified  that  Viscount  Ishii,  in  insist- 
ing on  the  inclusion  of  a  recognition  of  Japan's  special 
interests,   did  mention    that    t!;>  uld   Ik-   a    Monroe 

Doctrine  for  the  Far  East,  in  response  to  which  Mr. 
Lansing  explained  that  what  special  interests  tin-  United 
States  had  in  the  Latin-American  Republics  was  not 
paramount  influence,  nor  exclusive  nor  special  privi- 
.  but  rather  the  preservation  to  these  Republics  of 
the  power  of  self-development  and  immunity  from  out- 
side interference : 


THE  "ASIATIC"  MONROE  DOCTRINE    249 

"At  another  interview  we  discussed  the  phrase  'special 
interest,'  which  the  Japanese  Government  had  been  very 
insistent  upon,  and  which,  with  the  explanation  I  have 
made,  I  was  not  very  strongly  opposed  to,  thinking  that 
the  reaffirmation  of  the  <  >pen  Door  policy  was  the  most 
essential  thing  that  we  could  have  at  this  time;  and 
we  discussed  the  phrase  which  appeared  in  the  draft  note 
'special  interest.'  and  I  told  him  then  that  if  it  meant 
'paramount  interest,'  I  could  not  discuss  it  further;  but 
if  he  meant  special  interest  based  upon  geographical  po- 
sition, I  would  consider  the  insertion  of  it  in  the  note. 
Then  it  was,  during  that  same  interview,  that  we  men- 
tioned 'paramount  interest'  and  he  made  a  reference  to 
the  Monroe  Doctrine,  and  rather  a  suggestion  that  there 
should  be  a  Monroe  Doctrine  for  the  Far  East. 

"And  I  told  him  that  there  seemed  to  be  misconcep- 
tion as  to  the  underlying  principle  of  Monroe  Doctrine, 
that  it  was  not  an  assertion  of  primacy  or  paramount 
interest  by  the  United  States  in  its  relation  to  the  Ameri- 
can republics ;  that  its  purpose  was  to  prevent  foreign 
Powers  from  interfereing  with  the  separate  rights  of 
any  nation  in  this  hemisphere,  and  that  the  whole  aim 
was  to  preserve  to  each  republic  the  power  of  self- 
development.  I  said  further  that  so  far  as  aiding  in  this 
development  the  United  States  claimed  no  special  privi- 
leges over  other  countries."  14 


It  is,  therefore,  clear  that   the  special  interests  which 
Lansin  uized   as  Japan's  in   China,  are  no  more 

than,  and  not  different  from,  the  special  interests  of 
the  United  Stale,  in  the  other  American  republics.  It 
o  plain  that  the  essential  principle  that  he  empha- 
sized in  the  understanding  was  the  principle  of  non- 
interference, with  the  territorial  integrity  and  political 
independence  of  ( Ihina,  either  by  Japan  or  other  Powers — 

line  cardinal  principle  which  the   American 

Monroe  Doctrine.    It  i    consequently  not  unsafe  td  con- 
clude that   in   n  Japan'  I    interests   in 

China,    due    to    the    geographical    proximity,    Secretary 


250       THE  POLICY  OF  JAPAN  IN  CHINA 

Lansing  inadvertently  extended  his  recognition  to  Japan's 
"Asiatic"  Monroe  Doctrine. 

Let  us  now  compare  and  contrast  Japan's  "Asiatic" 
Monroe  Doctrine  with  the  American  Monroe  Doctrine 
and  try  to  discover  the  similarities  and  differences  of 
the  two  policies.  With  respect  to  similarities,  both  arc 
based  on  the  principle  of  self-preservation.  Just  as  the 
United  States  would  not  permit  further  extension  of  the 
European  system  in  the  Western  hemisphere,  for  fear 
that  such  an  occurrence  would  endanger  her  own  peace 
and  safety,15  so  Japan  would  not  permit  any  further 
European  aggression  in  China  and  Eastern  Asia  lest  it 
should  menace  her  own  tranquillity  and  well-being. 
Again,  both  doctrines  are  founded  on  the  fundamental 
principle  of  non-interference.  While  permitting  the  usual 
intercourse  based  on  international  law  and  even  war  for 
redress  of  wrong,  collection  of  debts,  vindication  of  jus- 
tice, so  long  as  such  acts  do  not  affect  territorial  integrity 
and  political  independence,  the  United  States  would  not 
allow  other  non-American  states  to  interfere  with  the 
territorial  integrity  of  sister  American  Republics,  by  con- 
quest, or  colonization  or  extension  of  boundaries,  or 
transfer  by  purchase ;  nor  would  she  allow  any  non- 
American  interference  with  the  political  independence 
thereof  by  destruction  of  existing  governments,  or  estab- 
lishment of  new  governments,  or  control  of  government 
through  political  and  financial  concessions.  Likewise, 
Japan  would,  while  permitting  usual  commercial  and  po- 
litical intercourse,  put  a  similar  injunction,  as  far  as  pos- 
sible, on  any  further  European  aggression  in  China  and 
Eastern  Asia  that  would  interfere  with  the  territorial 
integrity  and  political  independence  of  the  same. 

With  respect  to  differences,  however,  there  are  two 
fundamental  distinctions.  In  the  first  place,  the  Ameri- 
can Monroe  Doctrine  carried  a  corollary  of  non-inter- 
ference   in   the   affairs   of   purely   European    or   Asiatic 


THE  "ASIATIC"  MONROE  DOCTRINE    251 

concern.  Hence  the  policy  of  no  entangling  alliances. 
In  other  words,  as  the  United  States  would  not  permit 
non-American  states  to  interfere  with  affairs  of  purely 
American  concern,  so  the  United  States  reciprocates  the 
measure  by  abstaining  from  affairs  of  purely  European 
or  Asiatic  concern.  Thus  the  American  Monroe  Doc- 
trine is  founded  on  the  principle  of  the  Golden  Rule. 
This,  however,  does  not  place  an  absolute  bar  on  the 
United  States  with  reference  to  intervention  in  affairs  of 
Europe  or  Asia.  If  her  own  interests  should  be  involved 
or  the  cause  of  humanity  at  stake,  she  would  not  hesitate 
to  intervene — a  right  sanctioned  in  international  law. 

But  the  "Asiatic"  Monroe  Doctrine  carries  no  such 
corollary ;  at  least  it  does  not  up  to  the  present  moment. 
Japan  did  not  abstain  from  affairs  of  European  concern. 
Instead  of  avoiding  entangling  alliances,  she  entered  into 
an  alliance  with  Great  Britain,  and  another  with  Russia 
in  1916.  Instead  of  standing  aloof  from  affairs  of 
European  concern,  she  participated  in  the  World  War, 
not  as  a  disinterested  belligerent  but  as  an  active  ally  of 
Great  Britain,  ousting  Germany  from  Shantung  and 
guarding  the  transportation  routes  between  Great  Britain 
and  India  and  Australia.  Once  more,  she  concluded 
agreements  with  Russia  in  1907  and  1910,  allowing 
Russia  to  perpetrate  in  Outer  Mongolia  and  North  Man- 
churia what  she  herself  intended  to  do  in  Eastern  Inner 
Mongolia  and  South  Manchuria. 

In  the  second  place,  the  American  Monroe  Doctrine 
prohibiting  non-American  states  from  interference  in 
the  Wotcni  hemisphere  applies  the  similar  injunction  on 
herself  with  equal  force.  That  is  to  say,  in  preaching 
to  other  nations  the  doctrine  of  non-interference  she  prac- 
tices the  doctrine  herself  and  thus  sets  the  example. 
Further,  she  docs  not  claim  any  primacy  or  paramount 
interest  or  special  privileges.  This  restriction  upon  her- 
self, however,  does  not  preclude  the  possibility  of  inter- 
vention, when  her  own  interests  are  involved,  or  when 


252       THE  POLICY  OF  JAPAN  IN  CHINA 

the  Monroe  Doctrine  is  jeopardized.  Thus,  she  tempo- 
rarily took  over  the  Governments  of  Haiti  and  San 
Domingo,  not  to  extinguish  the  political  independence  of 
these  states,  but  rather  to  preserve  the  same,  and  thus 
to  safeguard  the  sanctity  of  the  Monroe  Doctrine. 

But  Japan  did  not  place  the  same  restriction  upon  her- 
self. Instead  of  observing  the  doctrine,  she  assaulted 
the  sovereignty  of  China  by  the  presentation  of  Group  V 
of  the  Twenty-one  Demands.  Instead  of  protecting  the 
territorial  integrity  of  China,  as  Ishii  pledged,  she  enter- 
tained territorial  designs  upon  South  Manchuria  and 
Eastern  Inner  Mongolia,  and  attempted  to  acquire  the 
sovereignty  thereof  by  the  demand  for  police  power. 
Instead  of  preserving  the  Open  Door  in  China  for  the 
trade  of  the  world,  she  resorted  to  unfair  means  to  attain 
commercial  predominance,  to  the  exclusion  and  therefore 
detriment  of  the  merchants  of  other  foreign  states.  Thus, 
she  did  not  abstain  from  interference  with  the  sovereignty 
and  integrity  of  China,  which  she  asks  the  other  powers 
to  do.  In  short,  she  did  not  practice  what  she  preached, 
thus  failing  to  set  the  necessary  example. 

The  conclusion  can,  therefore,  be  reached  that  Japan's 
"Asiatic"  Monroe  Doctrine  is  like  the  American  in  that 
it  is  based  on  the  principles  of  self-preservation  and 
non-interference,  but  unlike  the  American  in  that  its 
promoter  did  not  reciprocate  its  spirit  by  refraining  from 
interference  in  affairs  of  European  concern,  nor  set  the 
example  of  applying  the  same  restriction  on  herself. 


NOTES  TO  CHAPTER  XV 

1,  2.  Japan's  Mighty  Mission,  by  Honorable  Mr  Iichiro 
Tokutonn,  the  chiet  editor  and  proprietor  <>f  the  Kokumin 
Shimbin,  Crown  Member  of  the  House  of  Peers  of  Japan, 
Peking  Post,  Feltruary  10,  1917,  Japan  Chronicle,  January  19, 
1{>17,  quoted  in  T.  Das,  Is  Japan  a  Menace  to  Asia?,  Appendix, 
p.  121  et  seq. 

3.    The   Sino-Japai  otiations,   1915,  p.  21;   China  Year 

Book,  1919,  p.  567. 


THE  "ASIATIC"   MONROE  DOCTRINE    253 

4.  The  Sino-Japanese  Negotiations,  1915,  p.  28. 

5,  6.  Ibid.,  p.  22;  pp.  69-70;  the  China  Year  Book,  1919,  pp. 
573-574. 

7.  Millard,  Democracy  and  Eastern  Question,  p.  119. 

8.  J.  W.  Kuks.  lapan  in  Action,  North  American  Review, 
Sept.,  1919.  pp.  318  319. 

9.  The  Imperial  Japan  n  to  the  United  States,  1917, 
Carneui  I  I  for  International  Peace;  Current  History, 
Vol.  7.  1917-18,  p.  356;  New  York  Times,  Sept.  30,  1917. 

10.  The  Imperial  Japai  on  to  the  United  States,  1917, 
Carnegie  Endowra  .  pp.  103-104;  Current  History,  Vol.  VII, 
1917-1               :  New  York  Times.  October  _'.  1917. 

11.  Hearings  on  the  Treaty  of  Peace  with  Germany  signed 
at  Versailles  on  June  28,  1919,  before  the  Senate  Committee  on 
Foreign  Relati'  sixth  Congress,  First  Session,  Senate 
Document  No.  100.  p.  226. 

12.  Millard,  Democracy  and  the  Eastern  Question,  pp.  162-163, 
Paul  S.  Reinsh's  Letter  to  the  Chinese  Government,  Nov.  8,  1917. 

13.  Hearings,  ibid.,  p.  147. 

14.  Hearings,  ibid.,  pp.  223-224. 

15.  Me-sage  of  James  Monroe,  Dec.  2,  1823,  American  Foreign 
Policy,  Carnegie  Endowment  for  International  Peace,  the  Di- 
vision of  Intercourse  and  Education,  Publication  No.  17,  pp.  5-6. 


XVI 

THE  TWENTY-ONE  DEMANDS  AS  AN   EXPO- 
NENT OF  JAPAN'S  POLICIES  IN  CHINA 

So  far  we  have  considered  the  five  policies  of  Japan 
in  China — economic  exploitation,  territorial  expansion, 
paramount  influence,  political  control  and  the  Asiatic 
Monroe  Doctrine.  We  shall  now  examine  an  historic 
document  which  bears  all  the  earmarks  of  these  five 
policies  and  which  has  since  become  the  best  exponent 
thereof ;  I  mean  the  original  Twenty-one  Demands. 

This  document  was  produced  under  conditions  of  world 
politics  which  rendered  it  the  fullest  and  clearest  revela- 
tion of  Japan's  intentions  and  desires  in  regard  to  China. 
It  was  presented  to  the  Chinese  Government,  as  we  all 
know,  on  January  18,  1915,  when  the  World  War  was 
raging  in  Europe.  In  consequence  of  the  war,  the  great 
Powers  receded  from  the  international  rivalry  in  China 
and  plunged  into  a  life-and-death  grapple  on  the  battle- 
fields of  Europe,  with  practically  no  energy  left  for 
further  aggressions  or  exploitation  in  China.  The  only 
great  neutral  Power  as  yet  not  involved  was  the  United 
States,  but  she  was  none  the  less  absorbed  in  the  prog- 
ress of  the  European  War  and  had  little  attention  to  give 
to  affairs  of  the  Far  East.  It  was  this  crisis  in  the 
world  situation,  when  the  tide  of  European  aggression 
had  just  ebbed,  and  when  the  United  States  had  just 
relaxed  in  her  resolution  to  enforce  her  Open  Door  doc- 
trine in  China,  that  Japan  took  advantage  of. 

When  the  Powers  were  present,  or  free  from  wars 
among  themselves,  Japan  dared  not  disclose  her  designs 
as  to  China,  for  fear  she  might  meet  the  united  opposi- 
tion of  the  Powers ;  and  so  she  had  to  wear  the  mask 

254 


THE  TWENTY-ONE  DEMANDS  255 

and  fall  in  line  with  the  Powers  in  their  common  policy 
of  international  cooperation,  and  he  contented  with  her 
spheres  of  influence,  limited  as  they  might  be.  But 
when  the  World  War  came  she  took  advantage  of  the 
unusual  opportunity,  or  such  an  opportunity  would  "not 
occur  for  hundreds  of  years  to  come."  1  Casting  aside  all 
ordinary  restraints,  and  counting  upon  success  in  her 
measure,  in  a  mad  rush  to  solve  the  Chinese  Question 
at  this  juncture,  she  unpremeditatedJy  discarded  her 
mask  and  exposed  her  full  intentions  and  designs  re- 
garding China,  as  we  shall  see  in  the  original  Twenty- 
one  Demands. 

Further,  the  original  Twenty-one  Demands  represented 
the  common  attitude  of  the  majority  of  the  Japanese 
in  regard  to  China.  While  there  were  some  who  had 
the  moral  courage  and  conviction  to  denounce  them,  the 
demands  were  nevertheless,  on  the  whole,  well  supported 
by  the  greater  part  of  the  electorate.  When  the  nego- 
tiations rspecting  the  Twenty-one  Demands  were  in  ses- 
sion, Count  Okuma  dissolved  the  Diet  on  an  issue  of 
army  increase,  and  appealed  to  the  people  for  a  new 
House  of  Representatives  that  would  support  him.2  In 
his  campaign,  he  purposely  avoided  the  issue  of  army  in- 
crease, but  founded  his  plea  for  support  on  the  value 
and  importance  of  his  China  policy.  The  returns  gave 
him  an  overwhelming  victory.  Supporting  the  Govern- 
ment were  the  Doshi-kai  with  150  votes,  the  Chusai-kai 
with  36  and  the  Independents  with  62  most  of  whom 
were  favorable  to  the  Government.  Opposing  the  Gov- 
ernment were  the  Seiyu-kai  with  106  votes  and  the  Koku- 

minto  with  27,  thus  giving  the  Government  a  clear  ma- 
jority of  about  fifty.  And  when  the  special  session  con- 
vened on  May  27,  1915,  while  it  was  too  late  to  pass 
upon  the  China  policy,  as  the  negotiations  respecting  the 
Twenty-one  Demands  had  already  heen  concluded  by  the 
Treaties  of  May  25,  1915,  the  House  nevertheless  passed 


256       Till:  POLICY  OF  JAPAN  IX  CHINA 

the  budget  estimate  for  increasing  the  appropriations  for 
army  and  navy."  Thus,  the  policy  upon  which  Count 
Okuma  had  insisted  in  December  of  strengthening  the 
armed  forces  of  the  country  "in  order  that  our  diplo- 
matic dealings  may  become  more  effective"  received  the 
legislative  sanction,4  or  in  other  words,  Count  Okuma's 
China  policy  as  represented  by  the  Twenty-one  Demands, 
or  in  short,  the  Twenty-one  Demands  themselves,  re- 
ceived  the  support  of  the  majority  of  the  Japanese  elec- 
torate. It  can,  therefore,  be  said  that  the  Twenty-one 
Demands  represented  the  common  attitude  of  the  Japa- 
nese people  regarding  China,  excepting  possibly  a  small 
minority.' 

Besides,  when  the  failure  to  impose  on  China  Group  V 
of  the  Twenty-one  Demands  had  subsequently  exposed 
Japan  to  the  bitter  antagonism  and  hatred  of  the  Chinese 
and  the  censure  of  the  Powers,  the  criticism  of  the 
Japanese  was  directed  upon  the  way  in  which  the  de- 
mands were  presented  and  negotiations  handled,  rather 
than  upon  intrinsic  right  or  wrong  of  the  demands  them- 
selves. It  can  be  said  that  the  majority  of  the  Japanese, 
even  after  the  failure  of  Group  V,  still  believed  that 
the  Twenty-one  Demands  wire  right  and  necessary  from 
the  point  of  view  of  the  welfare  of  Japan,  and  what 
criticism  they  offered  was  therefore  aimed  at  the  means 
by  which  the  ends  were  to  be  attained,  rather  than  the 
ends  themselves.  As  a  fair  illustration,  let  US  note  the 
statement:  "Not  that  these  demands  were  in  principle 
wrong  and  unjustifiable,  but  because  they  were  pressed 
upon  China  in  utter  disregard  of  the  susceptibilities  of 
the  nation  whose  friendship  she  had  been  professing  to 
value."''  And  this  attitude,  as  we  have  noticed,  was 
reflected  in  the  policy  of  Count  Terauchi,  who,  succeed- 
ing Count  Okuma,  changed  the  tactics  from  a  direct 
and  open  attack  through  diplomatic  channels  to  a  covert 
and  indirect  assault  through  loans,  arms  deal,  and  alli- 
ance with  pro-Japanese  officials  in  Peking. 


THE  TWENTY-ONE  DEMANDS  257 

When  we  submit  the  original  Twenty-one  Demands  to 
a  close  scrutiny,  we  find  that  the  division  into  five  groups 
was  done  in  rough  correspondence  with  the  five  policies 
of  Japan.  Whether  the  Japanese  statesmen  who  drafted 
them  originally  did  so  consciously  or  unconsciously,  we 
cannot  tell,  but  whatever  may  be  the  original  purpose  of 
the  division,  the  fact  remains  nevertheless  significant  that 
the  fivefold  division  should  coincide  roughly  with  Japan's 
fivefold  policy,  as  we  shall  see. 

The  first  group  relating  to  Shantung,  which  extends 
Japanese  influence  into  that  Province,  represents  the  pol- 
icy of  paramount  influence.  The  second  group  regarding 
South  Manchuria  and  Eastern  Inner  Mongolia  exempli- 
fies the  policy  of  territorial  expansion.  The  third  group 
as  to  the  Hanychping  Company  symbolizes  the  policy  of 
economic  exploitation.  The  fourth  group  dealing  with 
the  non-alienation  of  China's  coast  represents  the  "Asi- 
atic Monroe  Doctrine."  The  fifth  group  represents  the 
policy  of  political  control. 

If,  however,  we  should  group  the  demands  according 
to  the  five  policies,  then  the  conclusion  is  all  the  more 
evident  that  they  embody  all  the  five  policies  of  Japan 
and  therefore  constitute  the  best  exponent  thereof.7 

The  Policy  of  Economic  Exploitation 

group  II 

Article  4:  The  Chinese  Government  agrees  to  grant 
Japanese  subjects  the  right  of  opening  the  mines  in  South 
Manchuria  and    Eastern   Inner   Mongolia.     As   regards 

what  mines  are  to  be  Opened,  they  shall  be  decided  upon 
jointly. 

GROUP    III 

Article  1  :    The  two  <  'ontracting  Parties  mutually  agree 

that  when  the  opportune  moment  arises  the  Hanyehping 

Company  shall   lit:  made  a  joint  concern  ot  the  two  iu- 


258       THE  POLICY  OF  JAPAN  IN  CHINA 

tions,  and  they  further  agree  that  without  the  previous 
consent  of  japan,  China  shall  not  by  her  own  act  dispose 
of  the  rights  and  property  of  whatsoever  nature  of  the 
said  company  nor  cause  the  said  company  to  dispose 
freely  of  the  same. 

Article  2:  The  Chinese  Government  agrees  that  all 
mines  in  the  neighborhood  of  those  owned  by  the  1  tanyeh- 
ping  Company  shall  not  be  permitted,  without  the  con- 
sent of  the  said  company,  to  be  worked  by  other  persons 
outside  of  the  said  company;  and  further  agrees  that  if 
it  is  desired  to  carry  out  any  understanding  which,  it  is 
apprehended,  may  directly  or  indirectly  affect  the  inter- 
ests of  the  said  company,  the  consent  of  the  said  company 
shall  first  be  obtained. 


The  Policy  of  Territorial  Expansion 

group  II 

Article  2 :  Japanese  subjects  in  South  Manchuria  and 
Eastern  Inner  Mongolia  shall  have  the  right  to  lease  or 
own  land  required  either  for  erecting  suitable  buildings 
for  trade  and  manufacture  or  for  farming. 

Article  3:  Japanese  subject-  shall  be  tree  to  reside  and 
trade  in  South  Manchuria  and  Eastern  Inner  Mongolia 
and  to  engage  in  business  and  in  manufacture  of  any  kind 
whatsoever. 

group  v 

Article  3 :  Inasmuch  as  the  Japanese  Government  and 
the  Chinese  Government  have  had  many  cases  of  dispute 
between  Japanese  and  Chinese  police  to  settle  eases  which 
caused  no  little  misunderstanding,  it  is  for  this  reason 
necessary  that  the  police  departments  of  important  places 
(in  China)  shall  be  jointly  administered  by  Japanese  and 
Chinese  <>r  thai  the  police  departments  of  these  places 
shall  employ  numerous  Japanese,  so  that  they  may  at  the 
same  time  help  to  plan  for  improvement  of  the  Chinese 
Police  Service. 


THE  TWENTY-ONE  DEMANDS  259 


The  Policy  of  Paramount  Influence 

group  I 

Article  I :  The  Chinese  Government  engages  to  give 
full  assent  to  all  matters  upon  which  the  Japanese  Gov- 
ernment may  hereafter  agree  with  the  German  Govern- 
ment relating  to  the  disposition  of  all  rights,  interests 
and  concessions,  which  Germany,  by  virtue  of  treaty  or 
otherwise,  possesses  in  relation  to  the  Province  of  Shan- 
tung. 

Article  2:  The  Chinese  Government  engages  that 
within  the  Province  of  Shantung  and  along  its  coast  no 
territory  or  island  will  be  ceded  or  leased  to  a  third  party 
under  any  pretext. 

Article  3 :  The  Chinese  Government  consents  to 
Japan's  building  a  railway  from  Chefoo  or  Lungkow  to 
join  the  Kiaochow-Tsinanfu  Railway. 

Article  4 :  The  Chinese  Government  engages  in  the 
interest  of  trade  and  for  the  residence  of  foreigners,  to 
open  by  herself  as  soon  as  possible  certain  important 
cities  and  towns  in  the  Province  of  Shantung  as  Commer- 
cial Ports.  What  places  shall  be  opened  are  to  be  jointly 
decided  upon  in  a  separate  agreement. 


GROUP    II 

Article  1  :  The  two  Contracting  Parties  mutually  agree 
that  the  term  of  lease  of  Port  Arthur  and  Dalny  and  the 
term  of  lease  of  the  South  Manchuria  Railway  and  the 
Antung-Mukden  Railway  shall  be  extended  to  the  period 
of   99   years. 

Article  5:  The  Chinese  Government  agrees  that  in  re- 
spect of  the  (two)  cases  mentioned  herein  below  the 
Japanese  Government's  consent  shall  he  firsl  obtained 
before  action  i^  taken : — 

i  a )   Whenever  permis  ion  is  granted  to  the  subject  of 

a  third  rower  to  build  a  railway  or  to  make  a  loan 
with  a   third    Power    for   the   purpose   <>f   building 


260       THE  POLICY  OF  JAPAN  IN  CHINA 

a  railway  in  South  Manchuria  and  Eastern  Inner 

Mongolia. 
(b)   Whenever  a  loan  is  to  be  made  with  a  third  Power 

pledging  the  local  taxes  of  South  Manchuria  and 

Eastern  Inner  Mongolia  as  security. 
Article  6:  The  Chinese  Government  agrees  that  if 
the  Chinese  Government  employs  political,  financial  or 
military  advisers  or  instructors  in  South  Manchuria  and 
Eastern  Inner  Mongolia,  the  Japanese  Government  shall 
first  be  consulted. 

Article  7:  The  Chinese  Government  agrees  that  the 
control  and  management  of  the  Kirin-Changchun  Railway 
shall  be  handed  over  to  the  Japanese  Government  for  a 
term  of  99  years,  dating  from  the  signing  of  this  agree- 
ment. 

group  v 

Article  5 :  China  agrees  to  grant  to  Japan  the  right 
of  constructing  a  railway  connecting  Wuchang  with  Kiu- 
kiang  and  Xanchang.  another  line  between  Xanchang  and 
Hangchow,  and  another  between  Nanchang  and  Chao- 
chow. 

Article  6:  If  China  needs  foreign  capital  to  work 
mines,  build  railways  and  construct  harbor  works  (in- 
cluding dock-yards)  in  the  Province  of  Fukien,  Japan 
shall  be  first  consulted. 

Article  2:  Japanese  hospitals,  churches  and  schools 
in  the  interior  of  China  shall  be  granted  the  right  of  own- 
ing land. 

Article  7:  China  agrees  that  Japanese  subjects  shall 
have  the  right  of  missionary  propaganda  in  China. 


The  Policy  of  Political  Control 

group  v 

Article  1  :  The  Chinese  Central  Government  shall  em- 
ploy influential  Japanese  as  advisers  in  political,  financial 
and  military  affairs. 


THE  TWENTY-ONE  DEMANDS  261 

Article  3:  Inasmuch  as  the  Japanese  Government  and 
the  Chinese  Government  have  had  many  cases  of  dis- 
pute between  Japanese  and  Chinese  police  to  settle  cases 
which  caused  no  little  misunderstanding,  it  is  for  this 
reason  necessary  that  the  police  departments  of  impor- 
tant places  ( in  China  )  shall  be  jointly  administered  by 
Japanese  and  Chinese  or  that  the  police  departments  of 
these  places  shall  employ  numerous  Japanese,  so  that 
they  may  at  the  same  time  help  to  plan  for  the  improve- 
ment of  the  Chinese  Police  Service. 

Article  4:  China  shall  purchase  from  Japan  a  fixed 
amount  of  munitions  of  war  (say  50  per  cent  or  more) 
of  what  is  needed  by  the  Chinese  Government  or  that 
there  -hill  he  established  in  China  a  Chino-Japanese 
jointly  worked  arsenal.  Japanese  technical  experts  are 
to  be  employed  and  Japanese  material  to  be  purchased. 


The  Policy  of  Asiatic  Monroe  Doctrine 

group  IV 

The  Chinese  Government  engages  not  to  cede  or  lease 
to  a  third  Power  any  harbor  or  bay  or  island  along  the 
coast  of  China. 


It  may,  therefore,  be  said  that  the  original  Twenty- 
one  Demands  constitute  to-day  the  best  one-piece  historic 
document  that  embodies  all  the  five  policies  of  Japan  in 
China.  Produced  as  they  were  under  the  favorable 
opportunity  of  the  World  War.  supported  a-  they  were 
by  the  majority  of  the  Japanese  electorate,  revealing  as 
they  did  in  the  dearesl  and  fullest  manner  the  intentions 
and  desires  of  the  Japanese  people  regarding  China  at 
that  time,  and  divided  as  they  were  into  five  groups  in 
correspondence  with  the  five  policies  of  Japan,  wt 
can  hence  reaffirm  our  conclusion  that  they  constitute 

to-day  tin-  hot  exponent  of  Japan's  policies  in  China. 


262       THE  POLICY  OF  JAPAN  IN  CHINA 


NOTES  TO  CHAPTER  XVI 

1.  Putnam  Wcale,  The  Fight  for  the  Republic  in  China,  p.  128. 

2.  Hornbeck,  Contemporary  Politics  in  the  Far  Hast.  p.  176. 

3.  Hornbeck,  Contemporary  Politics  in  the  Far  Fast,  pp.  176- 
179. 

4.  Ibid.,  p.  179. 

5.  Ibid.,  p.  179.  For  instance.  Prof.  K.  Hayashi  of  Kcio  Uni- 
versity, and  a  member  of  the  Diet,  tendered  his  resignation  to 
his  party  and  registered  his  protest:  "Why  were  such  abominable 
demands  in  the  first  place  framed  by  the  Cabinet?  ...  It  is 
absolutely  an  insult  to  our  neghbor's  sovereignty.  Those  desires, 
if  accepted,  were,  that  China  would  consent  to  be  a  protectorate 
of  Japan." 

6.  Kawakami,  Japan  in  World  Politics,  p.  168;  Japan  and 
World  Peace,  p.  167. 

7.  The  Original  Twenty-one  Demands  can  be  found  in  the 
Chino-Japanese  Negotiations,  1915,  pp.  19-22. 


XVII 
THE  WISDOM  OF  JAPAN'S  POLICY  IN  CHINA 

It  is  but  fitting  and  proper  that  we  should  conclude 
this  Part  with  a  discussion  of  the  wisdom  of  Japan's 
policy  in  China.  As  the  shortest  road  to  convince  people 
is  to  appeal  to  their  self-interest,  we  propose  to  treat 
the  subject  from  the  point  of  view  of  the  welfare  and 
destiny  of  Japan,  rather  than  from  the  point  of  view  of 
China's  interests,  or  those  of  the  Far  East,  or  of  the 
world. 

As  we  recall,  Japan's  policies  in  China  turn  on  two 
fundamental  problems,  the  population  problem  of  Japan 
herself  and  the  Chinese  question.  As  we  have  also  seen, 
the  population  problem  of  Japan  results  in  the  adoption 
of  two  policies  towards  China — those  of  economic  ex- 
ploitation and  territorial  expansion.  Regarding  the  policy 
of  economic  exploitation,  we  have  no  quarrel  with  Japan. 
In  fact,  we  entertain  for  her  the  highest  good-will  and 
the  expectation  that  she  may  succeed  in  converting  her- 
self from  an  agricultural  to  an  industrial  and  commercial 
nation.  Particularly  with  reference  to  Japan's  needs 
for  iron,  coal  and  steel,  we  sympathize  with  our  neigh- 
bor and  arc  finite  willing  to  extend  our  cooperation. 
What  we  desire  in  this  matter  is  that  Japan  should  try 
to  reach  her  ends  in  fair  and  legitimate  ways.  As  long 
as  she  does  so,  we  have  absolutely  no  grievances,  but 
on  the  contrary,  we  wish  our  neighbor  unprecedented 
success. 

What  we  do  oppose  is  Japan's  policy  of  territorial  ex- 
pan-ion  in  South  Manchuria  and  Eastern  Inner  Mon- 
golia  which   form   integral   part-   of   (  hina.      She  claims 

that  inasmuch  as  she   has  preserved   the   integrity  of 

263 


2(A       THE   POUCY  OF  JAPAN   IX  CHINA 

Manchuria  by  her  sacrifice  in  the  Russo-Japanese  War, 
she  is  entitled  to  the  territory.1  But  she  should  recall 
that  she  fought  the  war,  not  primarily  for  the  preserva- 
tion of  Manchuria,  but  rather  for  self-preservation.  The 
indirect  effect  happened  to  be  the  preservation  of  Man- 
churia, but  that  does  not  entitle  her  to  the  ownership 
and  sovereignty  of  South  Manchuria  and  Eastern  [nner 
Mongolia.  The  best  she  can  ask  is  that  she  should  be 
compensated  for  her  sacrifice  in  forms  of  economic  con- 
cessions in  these  regions,  and  these  China  has  ah 
granted.  To  claim  that  inasmuch  as  she  has  preserved 
South  Manchuria  in  a  war  of  self-defer  therefore 

entitled  to  the  territory,   is  to  claim   more   than  justice 
and  equity  would  allow  her. 

Further,  these  regions,  while  not  yet  thickly  popu- 
lated, are  nevertheless  quite  well  peopled  by  about 
20,000.000  Chinese.2  For  Japan  to  expand  her  territorial 
limits  so  as  to  include  this  territory  is  to  bring  under 
her  jurisdiction  regions  already  well  occupied  by  the 
Chinese.  Hence  any  attempt  on  the  part  of  Japan  to 
annex  these  lands  will  meet  the  hostile  opposition  of 
the  people  therein  and  the  Chinese  residing  in  China 
proper.  For  Japan  to  cut  these  integral  parts  of  China 
from  the  body  of  the  Chinese  nation  will  create  a  con- 
dition of  Chinese  irridenta,  which  will  sit  up  eternal 
walls  of  hatred  between  the  two  peoples.  I'esides,  even 
though  she  might  be  able  to  absorb  thi  is,  Japan 

would  be  confronted  with  the  alternatives  of  being  ousted 
by  the  united  resistance  of  the  Chinese  in  these  regions 
and  in  China  proper,  or  of  subjugating  tin-  Chini 
China  proper.  As  Japan  is  hound  to  attempt  the  subju- 
gation of  the  Chinese  in  China  proper  as  a  measure  of 
self-defense,  the  annexation  of  South  Manchuria  and 
Eastern  Inner  Mongolia  will  inevitably  lead  to  eventual 
struggle  between  the  Chinese  and  the  Japanese.  Unless, 
therefore,  the  Japanese  are  prepared  to  go  the  length  of 
fighting   the    Chinese    people   and    making   them    eternal 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     265 

enemies,  her  policy  of  territorial  expansion  in  South 
Manchuria  and  Eastern  Inner  Mongolia  is  fraught  with 
serious  perils. 

Furthermore,  just  as  Japan  needs  an  outlet  for  her 
surplus  population,  so  China  needs  an  outlet  for  her  own. 
If  Japan's  increasing  population  needs  Manchuria  for 
an  outlet,  China's  400,000,000  will  likewise  increase  and 
need  the  same  relief.  If  Japan's  claim  to  Manchuria, 
as  based  on  the  need  of  an  outlet  for  surplus  popula- 
tion, be  valid,  then  China's  claim  to  the  same  territory, 
in  addition  to  her  recognized  ownership  and  occupation 
thereof,  is  ten  times  better  than  that  of  Japan.  Sup- 
porting this  claim  of  China,  it  is  well  said  by  an  impartial 
observer : 3 

"Told,  as  we  have  been  over  and  over,  that  Japan 
must  have  an  outlet  for  her  excess  of  population  and 
that  Manchuria  is  the  natural  outlet,  it  is  well  to  bear 
in  mind  that  China  also  has  a  crowded  population  and 
that  in  the  new  condition  in  which  the  awakening  Chinese 
people  find  themselves  a  movemenl  toward  the  relief  of 
the  present  congested  conditions  is  bound  to  manifest 
itself  in  an  attempt  at  redistribution.  This  will  mean 
pressure  outward.  Manchuria  is  a  natural  outlet  for 
Kcess  of  China's  population  more  truly  than  that 
of  Japan;  and,  as  far  as  rights  to  this  open  field  art-  con- 
cerned. China  ha-  the  better  claim.  The  pressure  of  ex- 
population  seeking  an  emigration  outlet  will  prob- 
able l)e  greater  Er<  a  than  from  japan  -for  there 
an-'  400*000,000  Chin.  compared  with  70,000.000 
Japanese  and  Korean-,  and  the  former  are  also  no  [ess 
adepl   at    'replenishing  the  earth'  than  are  the  latter. 

".  .  .  To  enter  Manchuria  the  I  hinese  have  but  to  step 

through  the  breach  in  the  lm  cat  wall  at  Shanhaikwan  or 
to  sail  aero>s  the  ninety  miles  of  water  between  tin-  Shan- 
tun-  Peninsula  and  the  Liaotung  Peninsula.  As  many 
Chinese  farmhand-  come  and  go  between  Chili  and  Shan 

Provinces  and   Manchuria  each  year  as  there  are 

Japanese  in  South  Manchuria  after  ten  years  of  occupa- 
tion.     What   people,   then,   would   it   Seem,   have   the   h<--t 


266       THE  POLICY  OF  JAPAN  IN  CHINA 

natural  right  to  Manchuria  ;  and  what  people,  if  events 
arc  left  to  their  natural  course,  will  settle  this  great  poten- 
tial outlet  for  excess  population?" 

Moreover,  Japan  does  not  need  other  land,  and  espe- 
cially land  well  occupied  by  the  Chinese,  for  purposes 
of  finding  an  outlet  tor  her  surplus  population.  Japan 
has  unused  land  within  her  own  confines  sufficient  to 
support  the  growing  population  of  Japan  for  the  next 
half  century.  According  to  the  estimates  of  Professor 
F.  H.  King,  Japan  has  now  about  15,400  square  miles  of 
cultivable  land  unused  and  with  that,  when  used,  she  can 
support  a  total  population  of  from  one  hundred  to  one 
hundred  and  fifty  million,  whereas  the  population  num- 
bered on  December  31,  1918,  only  57,070.936.3A  Pro- 
fessor King's  testimony  follows  : 4 

"The  Island  Empire  of  Japan  stretches  along  the  Asi- 
atic Coast  through  more  than  twenty-nine  degrees  of 
latitude  from  the  southern  extremity  of  Formosa  north- 
ward to  the  middle  of  Saghalien,  some  2,300  statute 
miles;  or  from  the  latitude  of  middle  Cuba  to  that  of 
north  Newfoundland  and  Winnipeg;  but  the  total  land 
area  is  only  175,428  square  miles  and  less  than  that  of 
the  three  states  of  Wisconsin,  Iowa  and  Minnesota.  Of 
this  total  land  area  only  23,698  square  miles  are  at  pres- 
ent cultivated;  7,151  square  miles  in  the  three  mainlands 
are  weed  and  pasture  lands.  Less  than  fourteen  per  cent 
of  the  entire  land  area  is  at  present  under  cultivation. 

"If  all  lands  having  a  slope  of  less  than  fifteen  degrees 
may  be  tilled,  there  yet  remain  in  the  lour  main  islands 
15,400  square  miles  to  bring  under  cultivation,  which  is 
an  addition  of  65.4  per  cent  to  the  land  already  cultivated. 

"The  lands  yet  to  be  reclaimed  are  being  put  under 
cultivation  rapidly,  the  amount  improved  in  1907  being 
64,448  acres.  If  the  new  lands  to  be  reclaimed  can  be 
made  as  productive  as  those  now  in  use,  there  should  be 
opportunity  for  an  increase  in  population  to  the  extent 
of  about  35,000,000  without  changing  the  ratio 

of  3.4  people  to  the  acre  of  cultivated  land. 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     267 

"While  the  remaining  lands  to  be  reclaimed  are  not  as 
inherently  productive  as  those  now  in  use,  improvements 
in  management  will  more  than  compensate  for  this,  and 
the  empire  is  certain  to  quite  double  its  present  main- 
tenance capacity  and  provide  for  at  least  a  hundred  mil- 
lion people  with  man)-  more  comforts  of  home  and  more 
satisfaction  for  the  common  people  than  they  now  enjoy. 

"Since  1S72  there  has  been  an  increase  in  the  popula- 
tion of  Japan  amounting  to  an  annual  average  of  about 
1.1  per  cent,  and  if  this  rate  is  maintained  the  one  hundred 
million  mark  would  be  passed  in  less  than  sixty  years. 
It  appears  probable,  however,  that  the  increased  acreage 
put  under  cultivation  and  pasturage  combined  will  more 
than  keep  pace  with  the  population  up  to  their  limit,  while 
the  improvements  in  methods  and  crops  will  readily  per- 
mit a  second  like  increment  to  her  population,  bringing 
that  for  the  present  empire  up  to  one  hundred  and  fifty 
million.  Against  this  view,  perhaps,  is  the  fact  that  the 
rice  crop  of  the  twenty  years  ending  in  1906  is  only  thirty- 
three  per  cent  greater  than  the  crop  of  183b." 

Thus,  the  testimony  of  Professor  King  clearly  shows 
that  Japan  has  enough  land  available  for  cultivation  not 
yet  used  which  can  yield  support  to  at  least  twice  as  many 
people  for  the  next  half  century.  Besides,  Japan  holds 
Formosa,  Korea  and  South  Saghalien,  which  offer  a 
further  opportunity  for  an  expansion  of  population  of 
from  20,000,000  to  25,000,000." 

More  than  this,  Japan  has  SO  far  failed  to  prove  her 
capacity  as  a  colonizing  race.  Despite  her  occupation 
of  Formosa  since  1895,  and  her  efforts  to  stimulate 
emigration  thereto,  through  subsidies  and  financial  assist- 
ances of  all  sort-,  only  148,831  Japanese  (on  December 

31,  1918)  have  been  indneed  to  Settle  there,  constituting 
but  4.06  per  cent  of  the  total  population.6  Similarly,  in 
the  case  of  Korea,  in  Jpite  of  the  Eact  that  it  is  the 

of   the   British    Isles,    it    has   only   about    one-third    of    the 

people  of  Britain,1  although  it  is  only  eleven  hours' 
ing  from  Shimonoseki.     In  all,  332,456  Japanese'  (on 


268       THE  POLICY  OF  JAPAN  IX  CHINA 

December  31,  1917)  had  settled  there.     Likewise,  in  the 

case  of  Manchuria,  in  spite  of  fifteen  years  or  so  of 
exploitation  and  colonization,   the  number  of   Japanese 

residing  there  is  reported  to  he  only  122,367°  (June, 
1918). 

This  evident  failure  of  Japan's  attempts  at  colonization 
is  due  to  three  main  reasons.  The  first  is  a  climatic  one. 
Japan  is  a  warmer  land  than  either  Korea  or  Manchuria, 
where  cold  weather  prevails  in  winter.  For  this  reason, 
Japanese  farmers  prefer  Japan  to  Korea  or  Manchuria. 
The  second  reason  is  the  clan  psychology  of  the  Japanese. 
They  do  not  like  to  leave  their  relatives  and  native  land 
for  life.  They  prefer  to  remain  at  home,  if  possible; 
and  if  driven  to  Korea  or  Manchuria,  they  will  stay  there 
only  as  long  as  is  necessary  to  accumulate  a  certain 
amount  of  money,  and  then  return  to  Japan.  The  third 
reason,  probably  the  strongest,  is  the  inability  of  the 
Japanese  to  compete  with  the  Chinese.  Given  equal  terms, 
the  Chinese  invariably  excel  the  Japanese,  both  in  wage- 
earning  capacity  and  work.  In  face  of  this  invincible 
economic  competition.  Japanese  settlers  have  either  to 
retire  (which  many  of  them  do)  or  to  secure  Govern- 
mental aid  or  to  resort  to  unfair  mean-,  which  many  of 
them  not  unfrequently  employ  to  gain  a  livelihood.10  In 
short,  given  equal  terms,  the  Japanese  have  almost  always 
proved  to  be  the  inferior  to  the  Chinese  in  economic 
competition. 

"Amongst  many  things  that  impi  ne  on  visiting 

Manchuria,   after   an    interval   of    years,    most    significant 

is  the  evidence  which  confronts  one  on  every  side  of 
the  economic  inferiority  of  the  Japanese,  when  competing 

with  the  Chinese,  either  as  merchants,  farmers,  artisans, 
or  manual  laborers.  1  he  Japanese  have  firmly  established 
their  Imperium  in  Imperio  throughout  Southern  Man- 
churia: .  .  .  hut  the  basic  factor  of  the  situation  lies 
ever  in  the  Chinaman's  ant-like  qualities  of  sober  thrift 
and  ceaseless  labor."  n 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     269 

It  is,  therefore,  quite  evident  that  however  Japan  may 
attempt  to  absorb  Manchuria,  none  but  the  Chinese  will 
ever  really  inherit  the  land. 

What  is  any  attempt  on  the  part  of  Japan  to 

annex  South  Manchuria  and  Eastern  Inner  Mongolia 
will  he  fatal  to  herself.  Not  only  will  this  create  hatred 
between  the  two  peoples,  but  will  inevitably  cause  the 
downfall  of  Japan.  She  fought  Russia  for  the  integrity 
of  China  in  Manchuria,  and  now  eats  her  own  words 
and  desires  to  annex  the  very  same  territory  which  she 
did  not  allow  Russia  to  take.  If  Russia  met  her  defeat 
by  the  seizure  and  occupation  of  Port  Arthur  and  Dalny 
after  she  had  dispossessed  Japan  of  the  same,  would 
Japan  not  meet  the  same  fate  if  she  should  follow  the 
path  that  once  led  Russia  to  defeat? 

Obviously,  the  solution  of  Japan's  problem  of  excess 
population  should  not  take  the  form  of  territorial  expan- 
sion in  South  Manchuria  and  Eastern  Inner  Mongolia, 
where  she  is  bound  to  meet  the  opposition  of  the  Chinese. 
It  should  rather  take  the  form  of  industrial  and  commer- 
cial expansion.  In  this  regard,  she  should  follow  the 
beaten  path  of  other  nations  who  have  successfully  solved 
the  same  problem.  Take  for  example  Germany.  Prior 
to  1880,  before  her  industrial  and  commercial  develop- 
ment, large  numbers  of  Germans  had  to  emigrate,  but 
after  industries  wen-  established,  the  population  increased 
from  about  forty  to  approximately  seventy  millions,  and, 
instead  of  emigration,  immigration  began.  Belgium  and 
I  [olland,more  thickly  populated  than  Japan, do  not  have  to 
resort  to  emigration,  the  increase  of  their  population  being 
absorbed  by  the  growing  industries.    I  f  Japan  would  learn 

from  the  experiences  of  other  nations,  she  would  ahandon 

her  policy  of  territorial  expansion  and  devote  her  ener- 
gies to  tile  |  olicj  of  industrial  and  commercial  expansion. 
Conceding,  for  argument's  sake,  that  Japan  must  have 

an   outlet    for   her   surplus   population,    for    which,   as   we 

have  9hown,  then  yet  no  necessity,  Japan  ought 


270       THE  POLICY  OF  JAPAN  IN  CHINA 

not  direct  her  policy  of  territorial  expansion  toward  re- 
gions already  well  occupied  by  the  Chinese  or  other 
people;  rather  she  should  seek  territories  unoccupied  or 

only  sparsely  populated.  Still  better,  she  should  purchase 
the  land  to  be  occupied  by  the  Japanese,  thus  avoiding 
the  seizure  of  any  territory  which  she  cannot  occupy 
without  a  clear  conscience.  Finally,  should  she  fail  to 
find  any  such  unoccupied  or  sparsely  populated  land  for 
colonization,  or  should  she  fail  to  effect  purchases,  she 
could  send  her  surplus  population  to  South  Manchuria 
and  Eastern  Inner  Mongolia,  provided  they  were  willing 
to  settle  under  the  Chinese  sovereignty. 

Passing  from  the  population  problem  of  Japan,  we  now 
come  to  the  Chinese  question.  For  reasons  previously 
stated,  she  considers  the  Chinese  question  as  one  vitally 
affecting  her  own  welfare  and  destiny,  in  consequence  of 
which  she  maintains  the  policy  of  an  Asiatic  Monroe  Doc- 
trine toward  the  Western  Powers  and  that  of  political 
control  toward  China.  Regarding  the  policy  of  her  Asiatic 
Monroe  Doctrine,  if  it  were  a  genuine  one,  we  would 
have  no  quarrel  with  Japan,  but,  on  the  contrary,  we 
would  have  full  respect  therefor;  but  as  regards  her 
policy  of  political  control,  we  differ  and  take  open  issue. 

In  the  first  place,  granting  for  argument's  sake  that 
the  political  instability  of  a  state,  as  it  affects  the  welfare 
and  safety  of  a  neighboring  nation,  justifies  political  con- 
trol, there  is  as  yet  no  imminent  necessity  for  such  a  step 
in  the  case  of  China.  However  dark  the  outlook  of 
her  political  conditions  may  be,  for  Japan  to  assault 
Chinese  sovereignty  in  1915  by  the  presentation  of 
Group  V  of  the  Twenty-one  Demands  is  nothing  less 
than  a  flagrant  disregard  of  the  sensitiveness  of  the 
Chinese.  The  United  States  acquired  political  control 
of  Haiti  and  San  Domingo,  but  this  was  done  only  when 
her  Monroe  Doctrine  was  in  danger  and  only  in  order  to 
preserve  the  sovereignty  of  these  states  and  not  to  domi- 


WISDOM  OF  JAPAN'S  POLICY  I\T  CHINA     271 

nate  or  subjugate  them.  Japan  desired  to  play  a  role 
in  China  similar  to  that  of  the  United  States  in  Haiti  and 
San  Domingo,  but  Japan  made  a  premature  move,  when 
there  was  as  yet  no  exigency,  and  especially  when  Japan 
had  failed  to  live  up  to  a  genuine  Asiatic  Monroe  Doctrine. 
In  the  second  place,  frankly  speaking,  Japan  is  not 
qualified  nor  worthy  to  obtain  political  control  of  China. 
Though  sin-  desired  political  control  primarily  to  fore- 
stall Western  control,  she  nevertheless  had  the  unworthy 
intention  of  controlling  China  so  that  she  might  always 
be  able  to  keep  her  a  subordinate  and  a  tool  of  Japan. 
Thus,  she  desired  control,  not  for  the  welfare  of  China, 
but  for  her  own  interest — not  to  hold  it  as  a  secred  trust, 
but  as  a  means  of  exploiting  China's  immense  natural 
resources  and  to  dominate  all  the  races  of  the  Orient." 
Again,  Japan's  record  in  Korea  has  been  such  that  few 
fair-minded  men  will  contend  that  she  is  qualified  to 
extend  her  control  any  further  into  the  mainland  of  Asia. 
Instead  of  treating  the  Koreans  as  equals  and  of  the 
same  race,  as  she  now  professes  in  regard  to  the  Chinese, 
she  treated  them  as  inferiors — the  hewers  of  wood  and 
drawers  of  water  for  the  Japanese.  Instead  of  preserving 
the  integrity  and  nationality  of  Korea,  as  she  professes 
in  the  case  of  China,  she  aimed  to  absorb  Korea  and  to 
exterminate  Korean  nationality.11  In  view  of  such  a 
glaring  abuse  of  political  power  over  a  subject  people, 
unless  she  changes  her  Korean  policy,  the  impartial  mind 
cannot  but  declare  Japan  unworthy  and  disqualified  to 
acquire  further  political  control  over  other  peopl  -  in 
Eastern  Asia. 

Tn  the  third  place,  were  Japan  qualified,  her  policy  ol 
political  control  would  no  doubl  meet  the  bitter  opposi- 
tion of  the  Chinese.    They  are  determined  to 
their  independence  and   sovereignty,  just   as  any 

people  would.     Nay,  pacific  as  they  are.  they 
are  ready  to  fight  and  die   for  their  home  and  liberty. 


272       THE  POLICY  OF  JAPAN  IN  CHINA 

They  began  the  Revolution  of  1911,  partly  to  overthrow 
the  yoke  of  the  Manchus,  but  largely  to  gain  the  reins 
ivernment  so  that  they  could  save  themselves  from 
partition  or  control.  Will  a  people  capable  of  doing 
this  be  so  low  as  not  to  resist  foreign  control,  particu- 
larly that  of  Japan?  The  student  strike  and  economic 
boycott  following  the  Shantung  decision  further  evi- 
denced the  true  spirit  of  Chinese  nationalism.  Can  a 
nation  that  is  able  to  rise  as  one  man  to  protest  against 
the  wreckage  of  their  heritage  and  injustice  to  their 
national  cause  be  so  supine  as  not  to  give  a  death  blow 
to  any  Power  that  would  deprive  them  of  their  inde- 
pendence ?  It  is  certain  that  any  policy  on  the  part 
of  Japan  to  control  China  will  meet  the  united  resistance 
of  400,000,000  democratic  and  liberty-loving  Chinese. 

In  the  fourth  place,  Japan's  policy  to  control  China 
will  inevitably  encounter  the  opposition  of  Western  Pow- 
ers. China  is  such  a  large  and  rich  country  and  the 
commercial  interests  of  the  other  Powers  therein  are  so 
immense  that  the  Western  nations  will  not  permit  Japan 
to  control  her  alone.  Should  there  be  any  necessity  for 
control,  the  Powers  would  unite  and  effect  a  scheme  of 
international  control,  rather  than  allow  Japan  to  control 
China  alone.  "In  the  long  run,  if  China  requires  'advice' 
or  control,  it  must  come  from  an  international  con- 
cert. .  .  ."  14  Again,  the  formation  of  the  New  Inter- 
national Banking  Consortium  at  the  close  of  the  World 
War  should  convince  the  Japanese  that  the  Western 
Powers  would  not  let  Japan  gain  a  stranglehold  on 
China's  finance,  but,  if  necessary,  would  internationalize 
the  control.  The  failure  to  exempt  South  Manchuria  and 
Eastern  Inner  Mongolia  from  the  scope  of  the  New  Con- 
sortium should  further  convince  Japanese  statesmen  that 
the  Powers,  by  the  advent  of  the  New  Consortium,  are 
determined  to  forestall  any  attempt  on  the  part  of  Japan 
to  gain  territorial  expansion  or  political  control  in 
China. 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     273 

Finally,  were  she  able  to  overcome  these  obstacles  and 
acquire  control  of  China,  it  is  doubtful  whether  Japan 
would  be  able  to  solve  the  Chinese  question.  Fundamen- 
tally, the  Chinese  must  solve  their  own  questions,  deter- 
mine their  own  destiny,  work  out  their  own  salvation. 
Japan  may  render  assistance  in  the  solution,  but  she  can 
scarcely  perform  the  task  which  the  Chinese  must  do 
for  themselves. 

The  solution  of  Chinese  questions  does  not  lie  in  politi- 
cal control.  It  lies  rather  in  sympathetic  assistance  and 
cooperation.  It  does  not  permit  of  insolent  affront  to 
the  sovereignty  of  China.  It  rather  calls  for  the  pro- 
tection of  a  genuine  "Asiatic"  Monroe  Doctrine.  It  does 
not  require  that  Japan  should  be  the  overlord  and  master 
of  China.  It  rather  desires  that  Japan  should  be  the  help- 
meet and  friend  of  China. 

Turning  now  from  the  Chinese  question,  we  come  to 
Japan's  policy  of  paramount  influence.  As  we  have  seen, 
this  policy  is  a  product  partly  of  the  population  problem 
of  Japan  and  partly  of  the  Chinese  question.  Based  on 
the  needs  of  a  surplus  population,  this  policy  aims  to  ac- 
quire the  largest  sphere  of  influence  and  trade  predomi- 
nance. Founded  on  the  necessity  of  the  Chinese  question, 
this  policy  proposes  to  secure  a  leading  role  or  a  special 
position  in  China.  Regarding  this  policy  we  do  not  differ 
with  Japan.  We  grant  that  she  may  gain  paramount 
influence  in  China  if  she  is  capable  of  doing  so.  Our  only 
request  is  that  she  should  do  so  in  a  fair  and  legitimate 

way. 

First   of  all,  she  01US1   nut  achieve  her  paramountcv  in 

trade   by   unfair   means.18      She   must   ii"t    try   to   exclude 

:i  competition  b)    preferential   rates  or  other  means 

of  prejudicial  discrimination.    ( >n  the  contrary,  she  must 

maintain  the  principle  of  the  equal  opportunity  of  trade, 

a-  required  by  the  <  >pen  I  k>or  doctrine. 

Secondly,  she  must  not  attempt  to  achieve  her  para- 
mount   influence   by    disregarding    Chinese   sovereignty. 


274       THE  POLICY  OF  JAPAN  IN  CHINA 

She  should  not  have  occupied  the  Tsingtau-Tsinan  Rail- 
way lying  within  Chinese  jurisdiction  and  in  defiance  of 
the  repeated  protests  of  China.  She  should  not  have 
established  police  stations  in  Shantung  and  Manchuria16 
in  evident  usurpation  of  Chinese  sovereignty,  nor  sin  mid 
she  have  stationed  her  troops  along  the  Chinese  Eastern 
Railway,  which  was  assigned  to  the  protection  of  the 
Chinese  Government. 

Finally,  to  claim  special  interests  in  China,  she  must 
fulfill  special  duties  toward  that  country.  As  right  and 
duty  are  correlatives,  Japan  cannot  enjoy  special  rights 
in  China  without  fulfilling  special  duties.  As  it  is,  how- 
ever, she  not  only  has  failed  to  fulfill  special  duties  aris- 
ing from  geographical  propinquity  and  racial  kinship, 
but  has  grossly  disregarded  her  duties  and  trespassed 
upon  the  rights  of  China.  Her  seizure  of  the  German 
railway  and  mines  in  Shantung,  her  police  stations,  her 
troops  along  the  Chinese  Eastern  Railway,  not  to  men- 
tion Group  V  of  the  Twenty-one  Demands — all  testify 
so  loud  against  the  violation  of  her  special  obligations 
that  she  has  almost  forfeited  any  special  rights  that  she 
might  have  acquired  by  reason  of  her  sacrifices  in  the 
Russo-Japanese  War,  or  by  virtue  of  geographical  pro- 
pinquity and  racial  kinship.  If,  therefore,  Japan  desires 
to  claim  special  rights  in  China,  she  must  fulfill  special 
duties  arising  out  of  such  propinquity  and  kinship.  In 
other  words,  the  similar  natural  advantages  that  give 
her,  as  claims,  special  rights  in  China  impose  on  her 
corresponding  special  duties.  Thus,  provided  Japan 
observes  the  principle  of  equal  opportunity  of  trade  and 
the  integrity  of  China  and  fulfills  the  special  duties  re- 
quired by  her  special  rights,  China  will  have  no  objection 
to  any  attempt  on  the  part  of  Japan  to  gain  a  position 
of  paramount  influence. 

Thus  far,  we  have  dealt  with  the  errors  of  Japan  in 
solving    her   own    population   problem   and   the    Chinese 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     275 

question,  and  in  reaching  the  position  of  paramount  influ- 
ence in  China.  We  will  now  go  deeper  into  these  causes 
and  probe  the  more  fundamental  wrongs.  As  policies  are 
national  attitudes  of  one  state  toward  the  other  formulated 
usually  in  the  best  interest  of  each  state,  the  more  funda- 
mental errors  of  Japan's  policy  in  China  lie  in  the  atti- 
tude of  the  Japanese,  or  at  least  of  the  responsible  Japa- 
nese statesmen.     In  other  words,  the  wrongs  are  moral. 

The  first  fundamental  error  is  Japan's  selfishness.  She 
is  intent  upon  the  satisfaction  of  her  own  needs.  In 
a  passion  of  blind  selfishness,  she  overlooks  the  rights 
of  China.  She  needs  coal,  iron  and  steel.  She  feels  she 
has  a  right  to  obtain  the  same  from  China,  by  fair  means 
or  foul.  She  needs  an  outlet  for  her  surplus  population ; 
so  she  demarcates  South  Manchuria  and  Eastern  Inner 
Mongolia  as  her  colonies,  and  steadily  encroaches  upon 
these  regions,  giving  no  heed  to  Chinese  sovereign  rights. 
When  she  desires  to  attain  a  paramount  position  in  China, 
she  does  so  by  excluding  foreign  influence  and  by  in- 
fringing upon  China's  sovereignty.  As  she  desires,  for 
her  own  welfare  and  dominance,  to  gain  the  political 
control  of  China,  she  commits  open  and  covert  assaults 
on  China's  sovereignty.  She  regards  her  own  interests 
so  much  that  she  neglects  those  of  China  and  sometimes 
attains  her  own  ends  at  the  expense  of  her  neighbor.  In 
other  words,  she  does  not  regard  the  rights  of  China 
as  her  own,  but  rather  as  a  means  to  her  own  gain  and 
ascendency.  To  put  it  in  another  way,  she  subordinates 
the  rights  and  interests  of  I  hina  to  those  of  her  own. 
This  is  not  the  application  of  the  Golden  Rule,  but  rather 
its  subversion  and  violation. 

The  second  fundamental  error  is  her  attitude  of  con- 
tempt toward  the  Chinese.  Having  defeated  china  in 
1895,  she  does  not  regard  her  as  an  equal.    I  laving  ■ 

Come    Russia   in    L905,   her  attitude  toward   (hina   grows 

worse.    In  tin  of  some  Japanese,  the  Chinese  are 


276       THE  POLICY  OF  JAPAN  IX  CHINA 

destined  to  suffer  the  Eate  of  the  Koreans.  That  is  the 
reason  why  the  Japanese  Government  has  not  infrequently 
deliberately  insulted  China  and  wantonly  ohstructed  the 
legitimate  exercise  of  China's  sovereign  power.  For 
instance,  when  China  notified  the  Japanese  Government 
of  the  cancellation  of  the  war  zone,17  she  resented  and 
called  this  perfectly  legitimate  action  on  the  part  of  the 
Chinese  Government  "improper,  arbitrary,  betraying,  in 
fact,  want  of  confidence  in  international  good  faith  re- 
gardless of  friendly  relations,"  declaring  also  "that  even 
if  your  Government  actually  cancels  the  communications 
concerning  the  creation  of  a  war  zone,  the  Imperial  Gov- 
ernment will  not  permit  the  movement  and  actions  of 
their  troops  within  a  necessary  period  to  be  affected  or 
restricted  by  such  act  of  cancellation."  1S 

Japan  must  realize,  however,  that  the  Chinese  people, 
however  disorganized,  are  man  for  man  the  equal  of  the 
Japanese,  both  in  intellect,  physical  power  and  moral 
caliber,  and  are  capable  of  becoming  as  great  a  nation 
as  Japan,  if  not  greater.  In  the  face  of  much  plain  facts, 
why  should  Japan  entertain  contempt  for  China  and  thus 
possibly  sow  the  seed  of  her  own  fall  ?  The  late  Bishop 
Bashford  said:  ".  .  .  It  is  incredible  that  the  Chinese 
people,  outnumbering  the  Japanese  sixfold,  man  for  man 
equaling  if  not  surpassing  them  in  industry  and  commerce, 
having  been  stronger  as  a  military  power  than  fapan 
over  twenty-nine  hundred  of  her  three  thousand  years 
of  history,  should  reverse  history  and  the  laws  of  sur- 
vival and  remain  permanently  weaker  than  Japan."  19 

The  third  fundamental  error  is  Japan's  attitude  of 
hopelessness  in  regard  to  China.  She  is  so  convinced 
of  her  inevitable  destruction  that  she  regards  her  at- 
tempt to  gain  political  control  of  the  latter  as  a  benevolent 
act.  She  is  so  sure  of  China's  incapacity  to  regenerate 
herself  that,  except  for  her  intervention,  she  believes  that 
China  is  bound  to  fall  under  the  control  of  the  Western 
Powers.     In  view  of  this  firm  conviction,  she  feels  no 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     277 

guilt  in  attempting  to  seize  the  reins  of  government  in 
China.  On  the  contrary,  she  feels  it  so  imperative  a 
remedy  for  China's  illness  that  she  must  postpone 
Group  V  for  future  discussion.  However  correct  the 
diagnosis  of  the  Japanese  statesmen  in  relation  to  the 
condition  of  the  Peking  Government,  she  nevertheless 
fails  to  see  the  source  of  salvation  already  visible  in  the 
Chinese  body  politic, — the  rising  spirit  of  Chinese  nation- 
alism. Bankruptcy  and  downfall  may  threaten  the 
Chinese  Government,  but  the  Chinese  people,  awakened 
and  fully  determined  to  preserve  their  own  liberty,  will 
one  day  turn  calamities  into  blessings.  If  Japanese 
state-men  could  only  see  this  better  side  of  the  Chinese 
national  life,  they  would  probably  change  their  attitude 
of  pessimism  and  antagonism  to  one  of  hopefulness  and 
friendliness. 

The  last,  but  not  the  least,  fundamental  error  is  the 
general  lack  of  good-will  on  the  part  of  Japan  towards 
the  Chinese.  With  the  exception  of  a  minority,  there 
are  numerous  Japanese  who  would  not  desire  to  see  a 
strong  and  united  China,  but  would  rather  see  China 
weak,  divided,  and,  still  better,  controlled  by  Japan. 
Prince  Yamagata  said:  "Japan  wants  a  weak  and  inca- 
pable China;  and  a  weak   China  under  a   weak  emperor, 

sub j eel  to  Japan's  influence,  would  be  the  ideal  state."-" 
>unt  [shii  said:  "Japan  could  not  regard  with  equa- 
nimity the  organization  of  an  efficient  Chinese  army  such 
as  would  1m-  required  by  her  active  participation  in  the 
war.  nor  could  Japan  fail  to  regard  with  uneasiness  a 
liberation  of  the  economic  activities  of  tin-  nation  of 
400,000,000  people."85  "Japan  views  with  great  alarm 
the     moral     awakening     of     the     four     hundred     million 

Chinese,"  said  Baron  Makino.  From  these  utterances 

of  the  highest  Japanese  authorities,  one  cannot  but  con- 
clude, though  mOSl  reluctantly,  that  Japan  entertains  little 
gOOd-will  towards  China.  Yet  Japan  must  realize  that 
the    rise    of    (   liina   a-    a    -leat    power    is    inevitable.       |n>t 


278       THE  POLICY  OF  JAPAN  IN  CHINA 

as  the  nineteenth  century  witnessed  the  rise  of  Germany, 
Italy  and  Japan,  so  the  twentieth  century  shall  witness 
the  rise  of  modern  China.  There  is  no  force  on  earth, 
except  the  Chinese  themselves,  that  can  hold  hack  this 
outcome.  Will  Japan  stand  in  the  way  of  China's  prog- 
Such  an  attitude  is  unworthy  of  SO  great  a  people 
as  the  Japanese  who  profess  to  exemplify  the  canons  of 
Bushido  and  who  have  demonstrated  such  prowess  in  the 
Russo-Japanese  War. 

The  first  step  in  the  revision  of  Japan's  policy  is  to 
change  her  entire  attitude  toward  China.  She  musl  do 
away  with  these  fundamental  errors.  She  must  liberate 
herself  from  the  bondage  of  selfishness  and  regard  the 
rights  and  interests  of  China  as  sacred  as  her  own.  Into 
the  bargain,  she  must  discard  her  contempt  for  the 
Chinese  and  assume  an  attitude  of  due  respect  and  cor- 
diality. Further,  she  >hould  not  concentrate  her  mental 
gaze  on  the  corruption  and  inefficiency  of  the  Chinese 
Government,  so  evident  now,  thus  inducing  an  attitude 
of  hopelessness  regarding  the  future,  but  should  rather 
note  the  promising  and  vigorous  aspect  of  Chinese  na- 
tional life — the  younger  generation  and  the  awakened 
nationalism.  Lastly,  she  should  not  desire  to  see  China 
weak  and  divided,  but  she  should  rather  cherish  abound- 
ing good-will  and  become  her  friend  and  counselor  in 
her  period  of  reconstruction. 

I  laving  thus  fundamentally  changed  her  national  atti- 
tude towards  China,  Japan  should  then  revise  her  policy. 
She  cannot  apply  her  five  policies  at  the  same  time,  as 
she  has  so  far  attempted  to  do.  They  are  irreconcilable 
and  inconsistent  with  one  another.  She  cannot  adopt  the 
policy  of  territorial  expansion  and  political  control,  and 
yet  at  the  same  time  expects  to  achieve  commercial  ex- 
pansion or  to  enforce  the  Asiatic  Monroe  Doctrine.  Simi- 
larly, she  cannot  adopt  the  policy  of  economic  exploita- 
tion or  of  commercial  expansion  and  the  "Asiatic"  Mon- 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     279 

roe  Doctrine,  and  yet  at  the  same  time  aim  to  seek 
territorial  expansion  and  political  control.  She  must 
choose  the  one  or  the  other. 

Should  she  choose  the  policy  of  territorial  expansion 
and  political  control,  she  should  then  abandon  the  policy 
of  commercial  expansion,  outright,  for  such  a  policy  will 
inevitably  kill  the  good-will  of  the  Chinese  and  hinder 
commercial  relations.  Similarly,  she  should  honestly  dis- 
avow the  "Asiatic"  Monroe  Doctrine,  for  a  policy  of  terri- 
torial expansion  and  political  control  will  so  violate  the 
principle  of  her  "Asiatic"  Monroe  Doctrine  that  it  will 
become  like  sounding  brass.  Besides,  she  must  be  fully 
prepared  to  fight  the  Chinese,  as  the  latter  are  deter- 
mined to  preserve  their  homes  and  liberty.  In  that  case, 
she  will  have  to  lay  upon  herself  and  her  people  the 
crushing  burden  of  militarism,  with  the  inevitable  con- 
sequences of  exorbitant  taxation,  the  high  cost  and  low 
standard  of  living,  a  low  intellectual  and  moral  standing, 
and  the  backwardness  of  industry  and  degeneration  of 
race.24  She  must  further  be  prepared  to  meet  the  united 
opposition  of  the  Great  Powers,  particularly  Great  Britain 
and  the  United  States,  who,  pledged  as  they  are  to  the 
Open  Door  doctrine,  will  not  let  Japan  alone  to  extend 
her  territorial  limits  in  China  or  gain  the  political  con- 
trol there.  It  is  practically  certain  that  any  attempt  on 
the  part  of  Japan  to  seek-  territorial  expansion  or  politi- 
cal control  will  result  in  tin-  ruin  of  Japanese  trade  in 
China,  the  nullification  of  her  "Asiatic"  Monroe  Doctrine, 
the  bitter  opposition  of  the  Chinese,  the  curse  of  mili- 
tarism and  the  opposition  and  disapprobation  of  the 
Powers.25 

On  the  other  hand,  should  Japan  adopt  the  policy  of 
commercial  expansion  and  an  "Asiatic"  Monroe  Doctrine, 

she  must  first  abandon  tin-  policy  of  territorial  expansion 

and  political  control,  which,  a-  we  have  seen,  are  incon- 
sistent and  irreconcilable  with  the  policy  of  commercial 
expansion   and   her   "Asiatic"    Monroe    Doctrine,      llav- 


280       THE  POLICY  OF  JAPAN  IN  CHINA 

ing  done  so,  she  can  then  consistently  seek  the  good- 
will of  the  Chinese  by  the  maintenance  of  a  genuine  Mon- 
roe Doctrine  which  she  proposes  to  employ  as  a  means 
to  protect  the  territorial  integrity  and  political  independ- 
ence of  China.  Having  thus  won  the  good-will  of  the 
Chinese,  her  commercial  expansion  and  position  of  para- 
mount influence  will  naturally  and  inevitably  follow.  In 
other  words,  she  should  revert  to  the  days  preceding  her 
victories  over  Russia  and  observe  strict  adherence  to 
the  principles  of  the  Open  Door,  with  this  difference, 
however,  that  the  passive  pledge  to  respect  the  integrity 
and  independence  of  China  should  be  changed  to  a  posi- 
tive engagement  to  protect  the  same.  In  this  case,  Japan 
can  remain  in  peace  with  China  and  maintain  friendship 
with  the  other  Powers.  Thus  can  she  attain  her  destiny 
of  becoming  the  leader  and  protector  of  the  Far  East  for 
the  next  generation. 

A i  this  parting  of  the  ways,  which  road  will  Japan 
take?  It  is  fondly  hoped  and  sincerely  prayed  that  her 
sagacious  statesmen  will  make  the  right  choice. 


NOTES  TO  CHAPTER  XVII 

1.  Vide  supra,  chapter  on  the  Policy  of  Territorial  Expansion. 

2.  Statesmen's  Year  Book,  1920,  p.  75. 

3.  Hornbeck,  Contemporary  Politics  in  the  Far  East,  p.  271. 
3A.    Statesmen's  Year  Book,  1920,  on  Dec.  31,  1918,  p.  1018. 

4.  F,  II.  King,  The  Farmers  <>f  Forty  Centuries,  pp.  424--42<>. 

5.  Bashford,  China.  An  Interpretation,  p.  396. 

6.  lapan  Year  Book,  1920-21,  p.  723,  on  Dec  31,  1^18. 

7.  Korea,  16,  619,  431,  lapan  Year  Book,  1920-21,  p.  703,  Dec 
31,  1917;  British  Isles,  45.  516.  259,  Statesmen's  Year  Book,  1920, 

p.  13,  census  taken  April  2,   l'Ml. 

8.  lapan  Year  Book  1920  21,  p.  703,  on  Dec  31,  1917. 

9.  Japan  Year  Book,  1920-21,  p.  34,  June.  1918,  Returns  by 
the  Foreign  Dept  of  Japan. 

10.  Vide  supra,  chapter  on  the  Policy  of  Paramount  Influ- 
ence. 

11.  Millard's  Review,  Oct.  9,  1920,  p.  309,  J.  0.  I'.  Bland,  on 
China's  New  Strong  Man — Chang  Tso-hin,  quoted  from  North 
China  Daily  News. 


WISDOM  OF  JAPAN'S  POLICY  IN  CHINA     281 

12.  Vide  supra,  chapter  on  the  Policy  of  Political  Control. 

13.  For   a    full    account   of    Japan    in    Korea,    see   Mackenzie, 
t'a  Fight  for  Freedom. 

14.  Editorial,  "The  Nation,"  London,  May  8,  1915,  quoted  in 
Millard.  Our  Eastern  Question,  pp.  239-241. 

15.  Vide  supra,  chapter  on  the  Policy  of  Paramount  Influence. 

16.  Editorial,  Millard's  Review,  Feb.  1".  1921,  p.  637  et  scq. 

17.  The  Shantung  Question,  Presented  bj  China  to  the  Paris 
Peace  Conference,  published  by  the  Chinese  Natl.  Welfare  Soc. 
of  America.  March,  1920,  App.,  Note  of   Ian.  7,  1915,  p.  61. 

18.  Ibid.,  pp.  61-62,  Note  of  Jan.  9,  1915. 

19.  Bashford,  China  and  Interpretation,  p.  409. 

20.  Millard,  <  >ur  Eastern  Question,  p.  168. 

21.  Millard.  Democracy  and  the  Eastern  Question,  p.  99. 

22.  23.  H.  K.  Tong,  article  on  How  Japan's  Policy  Is  Under- 
mining Her  Position  in  China,  Millard's  Review,  Aug.  9,  1919, 
p.  388. 

24.  Cf.  Tokio  Nichi  Nichi.  translated  in  Japan  Weekly  Chroni- 
cle, quoted  in  Millard's  Review,  Oct.  23,  1920,  pp.  402-403.  the 
Statement  of  Osaki  Yukio :  "The  low  intellectual  and  moral 
Standing  of  this  nation  and  the  backwardness  of  various  indus- 
tries here  are  due  to  many  causes.  But  the  most  important  of 
them  is  the  sway  militarism  holds  over  the  country.  .  .  .  Mili- 
tarism has  never  long  kept  company  with  national  prosperity,  as 
conclusively  proved  by  the  history  of  the  Tsing  Dynasty  of 
China,  of  Germany,  Russia.  Austria  and  Turkey.  Militarism  is 
a  principle  ruinous  to  the  state." 

25.  While    defense   may   be    made    that   the    United    States,    in 
of  the  Monroe  Doctrine,  extended  westward  in  accordance 

with  her  manifest  destiny  and  at  the  expense  of  Mexico,  the 
vital  difference  must  be  pointed  out  that  the  United  Stati 
tended  in  the  direction  of  practically  unoccupied  or  most  sparsely 
populated  regions,  and  not  infrequently  by  way  of  purchases, 
whereas  Japan  aims  to  extend  over  regions  well  occupied  and 
populated  by  the  Chinese  and  in  deliberate  violation  of  China's 
sovereign  rights. 


PART  IV 

IMPAIRMENTS  OF  CHINA'S  SOVEREIGNTY 

XVIII.     Extraterritoriality    and    Consular    Juris- 
diction. 

XIX.  Concessions  and  Settlements. 

XX.  Leased  Territories. 

XXI.  Spheres  of  Influence  or  Interest. 

XXII.  The  Most  Favored  Nation  Treatment. 

XXIII.  Tariff  Autonomy. 


XVIII 

EXTRATERRITORIALITY   AND   CONSULAR 
JURISDICTION 

We  have  so  far  surveyed  the  policies  of  the  Great 
Powers  in  China,  dealt  in  Part  II  with  Russia,  France, 
Germany,  Great  Britain  and  the  United  States,  and  in 
Part  III,  exclusively  with  Japan.  We  will  now  proceed 
to  consider  the  impairment  of  China's  sovereignty,  as 
represented  by  Extraterritoriality  and  Consular  Jurisdic- 
tion, Settlements  and  Concessions,  Leased  Territories, 
Spheres  of  Influence,  the  Most  Favored  Nation  Treat- 
ment, and  Tariff  Autonomy.  We  will  begin  with  the 
first-named — Extraterritoriality  and  Consular  Jurisdic- 
tion. 

By  extraterritoriality  is  meant  "a  form  of  privilege  or 
exemption  consisting  of  a  limitation  of  territorial  sov- 
ereignty with  regard  to  certain  persons  and  certain  places, 
which  under  international  law  enjoy  the  privilege  of 
remaining  outside  the  jurisdiction  of  the  state  in  whose 
territory  they  are  situated;"1  or,  in  short,  it  is  "an  ex- 
clusive exemption  from  the  operation  of  the  local  law."  - 

Defined  as  such,  it  is  a  privilege  granted  in  limitation  of 
territorial  sovereignty.  In  international  law  it  is  a  funda- 
mental principle  that  the  territorial  sovereign  exercises 
supreme  power  over  all  the  people,  natives  or  aliens,  re- 
siding within  the  limits  of  his  territory.  With  the  con- 
cession of  this  privilege,  however,  the  supreme  power 
of  the  territorial  sovereign  is  limited  or  unpaired  to  the 
extent  that  aliens  enjoying  this  form  of  special  privilege 
are  exempted   from  the  jurisdiction  of  his  tribunals. 

Again,  it  is  a  privilege  that  confers  the  righl  to  exercise 
jurisdiction   over   the    nationals    in    a    foreign    territory. 

285 


286       IMPAIRMENTS  OF  SOVEREIGNTY 

This  right  is  usually  exercised  hy  legislation  through  the 
legislative  organ  of  the  government,  thus  making  laws 

to  govern  nationals  abroad,  and  through  the  investment  of 
authorities  accruing  from  laws  thus  made  in  consular  and 
diplomatic  officers  residing  abroad,  and  also  in  the  estab- 
lishment of  consular  courts  and  other  extraterritorial 
courts  for  the  administration  of  justice  in  the  case  of 
nationals.  In  brief,  it  extends  jurisdiction  over  the 
realm  of  another  state  and  functions  with  respect  to  ad- 
ministration of  justice  over  nationals  abroad  on  behalf 
of  the  territorial  sovereign. 

Besides,  it  is  a  privilege  granted  with  the  consent  of 
the  territorial  sovereign  by  way  of  conventions  or  treaties, 
which  form  the  basis  of  the  privilege  and  without  which 
no  foreign  Power  has  the  inherent  right  to  enjoy  the 
same.  Considered  in  this  light,  it  is,  consequently,  merely 
a  delegated  power  from  the  territorial  sovereign  to  for- 
eign states  enjoying  the  privilege.  As  such,  in  accordance 
with  the  established  rules  of  interpretation,  the  exercise 
of  the  delegated  power  must  be  founded  on  express  or  im- 
plied grant;  any  undelegated  or  unsurrendered  Power  is 
construed  to  remain  intact  with  the  territorial  sovereign; 
and,  in  case  of  doubt,  the  uncertainty  will  be  absolved  in 
favor  of  the  sovereign  grantor.  In  other  words,  the  rule 
of  strict  construction  will  apply. 

Further,  it  is  a  privilege  granted  only  for  so  long  a 
period  as  the  territorial  sovereign  is  not  capable  of  ful- 
filling the  duties  of  administering  justice  and  affording 
protection  to  life,  liberty  and  property  in  accord  with 
modern  or  Western  standards  of  civilization.  This,  ipso 
facto,  means  that  as  soon  as  the  territorial  sovereign  is 
capable  and  ready  to  fulfill  the  necessary  duties,  the 
privilege  should  be  surrendered.  It  is  thus  a  temporary 
privilege  exacted  to  penalize  the  territorial  sovereign  for 
the  relative  backwardness  of  its  judicial  system,  and  with 
the  implied  obligation  to  surrender  the  same  as  soon  as 
the  judicial   administration  of   the  territorial   sovereign 


CONSULAR  JURISDICTION  287 

has  advanced  to  a  certain  degree  of  proficiency.  "The 
case  of  Japan,"  said  (  tppenheim,  "is  an  example  of  the 
readiness  of  the  Powers  to  consent  to  the  withdrawal  of 
consular  jurisdiction  in  such  states  as  soon  as  they  have 
reached  a  certain  level  of  civilization."  3 

Having  stated  the  general  principles  underlying  extra- 
territoriality, we  will  now  briefly  sketch  its  historical  de- 
velopment in  China.  Prior  to  the  advent  of  the  Maritime 
Powers,  China  was  accustomed  to  make  reciprocal  con- 
cession of  extraterritorial  jurisdiction  to  the  neighboring 
Oriental  states.  That  is,  in  extending  extraterritoriality 
to  the  other  Oriental  states,  she  demanded  and  acquired 
similar  reciprocal  privileges.  So,  in  the  very  first  treaty 
— that  of  Nerchinsk  with  Russia  in  1689, — reciprocal  con- 
cessions of  extraterritoriality  were  granted  (Art.  2).4 
Again,  in  the  Treaty  of  1727,  similar  concessions  of  re- 
ciprocal extraterritoriality  were  provided  (Art.  10),5 
which  were,  however,  altered  and  amplified  by  the  sup- 
plementary treaty  of  1768,  minutely  stipulating  the  pro- 
cess of  arrest  and  delivery  of  criminals." 

Even  in  the  Treaty  of  Kouldja  in  1851,  which  took 
place  about  a  decade  after  the  Maritime  Powers  had 
exacted  the  privilege  of  extraterritoriality  from  China, 
the  arrangement  was  still  for  a  reciprocal  concession  of 
extraterritoriality  (Art.  7  ) .'  And  it  was  not  until  1858, 
when  Russia  sought  concessions  similar  to  those  accorded 
to  the  Maritime  Powers  under  the  aegis  of  the  British  and 
French  arms,  that  Russia  secured  the  same  privilege  of 
extraterritoriality  as  were  enjoyed  by  the  maritime  pow- 
ers (Art.  7)."  Likewise,  in  the  Treaty  of  Commerce  and 
Navigation  with  Japan  in  1872,  the  privilege  of  extra- 
territoriality was  not  granted  unilaterally,  but  a  recipro- 
cal concession  thereof  was  made  (Art.  9).'  Audit  was  not 

until  Japan  had  defeated  <  hina  in  the  War  of  1894-5  that 

she  obtained  privileges  of  extraterritoriality  such  as  were 
enjoyed  by  the  Maritime  Powers,   in  the  Treaty  of  Shi- 


288        IMPAIRMENTS  OF  SOVEREIGNTY 

monoseki  in  1895,  the  grant  of  the  most  favored  nation 
treatment  was  made  (Art.  6),10  which  naturally  included 
the  privilege  of  extraterritoriality.  In  the  subsequent 
Treaty  of  Commerce  and  Navigation  in  1896  the  privi- 
lege was  specifically  .stipulated  (Art.  20). n  Similarly 
in  the  Treaty  of  Amity  and  Commerce  with  Korea  in 
1899,  despite  the  fact  that  the  other  Powers  had  prac- 
tically enjoyed  extraterritorial  privileges  for  about  half 
a  century,  Korea  was  given,  not  the  privilege  of  extra- 
territoriality as  enjoyed  by  the  other  Powers,  but  the 
reciprocal  concession  of  extraterritorial  jurisdiction  (Art. 
5).12  Thus  the  thesis  can  be  ventured  that,  prior  to  the 
advent  of  the  Maritime  Powers,  China  was  accustomed 
to  the  practice  of  reciprocal  concessions  of  extraterritorial 
jurisdiction  in  her  relations  with  neighboring  Oriental 
states,  and,  as  we  shall  see  presently,  that  the  privilege 
of  extraterritoriality  as  now  enjoyed  by  the  Powers  un- 
ilaterally was  originated  by  the  Maritime  Powers. 

As  the  Maritime  Powers  arrived  (particularly  Great 
Britain),  the  history  of  extraterritoriality  turned  a  new 
leaf.  They  insisted  on  the  enjoyment  of  the  privilege,  and 
yet  at  the  same  time,  relying  upon  the  superiority  of  their 
own  civilization,  would  not  consider  the  idea  of  recipro- 
cating the  same.  Thus,  China  insisted  on  the  assertion 
of  territorial  jurisdiction  over  these  "barbarians,"  whereas 
the  Maritime  Powers  resisted  and  claimed  exemption. 
Relating  the  instances  of  this  conflict,  J.  B.  Moore 
wrote: 13 

"When  crimes  had  been  committed  there  by  foreigners 
other  than  Portuguese,  the  Government  had  never  failed 
to  assert  its  jurisdiction  to  seize  the  accused  if  accessible 
on  land,  and  to  demand  his  surrender  if  on  board  of  a 
ship.  The  claim  of  surrender  had  sometimes  been  suc- 
cessfully resisted,  and  some  times  acquiesced  in.  In 
1780,  a  French  seaman,  who  killed  a  Portuguese  seaman 
in  one  of  the  hongs  of  Canton,  was  delivered  up  to  the 
local  authority,  by  whom  he  was  tried,  convicted,  and  ex- 


CONSULAR  JURISDICTION  289 

ecuted.  In  1784  the  gunner  of  an  English  merchant  ship, 
who,  in  firing  a  salute,  had  killed  a  Chinese,  was  given 
up  and  executed.  .  .  .  Captain  Elliott,  of  the  British 
navy,  however,  at  an  early  stage  of  the  controversy  be- 
tween his  Government  and  that  of  China,  refused  to  give 
up  some  English  sailors  who  were  charged  with  homi- 
cide." 

Supporting  this  firm  position,  as  early  as  1833,  a  Brit- 
ish Court  of  Justice  for  China  was  proposed  and  passed,14 
the  carrying  out  of  which,  however,  was  unsuccessful. 
Again,  in  1838,  the  same  measure  was  proposed  in  the 
House  of  Commons:15  "with  even  greater  power  and 
jurisdiction."  l8  This  was,  however,  withdrawn  on  ac- 
count of  strong  opposition  in  the  House.  And,  despite 
these  repeated  efforts,  it  was  not  until  after  the  Opium 
War  that  England  obtained  the  privilege. 

In  the  Treaty  of  Nanking  in  1842,  there  was  no  spe- 
cific mention  of  the  grant  of  extraterritoriality,  but  in 
the  subsequent  general  regulations  governing  British  trade 
at  the  five  ports  of  Canton,  Amoy,  Foochow,  Ningpo,  and 
Shanghai,  concluded  on  October  8,  1843,  the  first  pro- 
vision of  the  concession  of  extraterritoriality  appeared.17 

"Whenever  a  British  subject  has  reason  to  complain  of 
a  Chinese,  he  must  first  proceed  to  the  consulate  and  state 
his  grievance;  the  consul  will  thereupon  inquire  into  the 
merits  of  the  case,  and  do  his  utmost  to  arrange  it  ami- 
cably. In  like  manner,  if  a  Chinese  have  reason  to  com- 
plain of  a  British  subject,  he  shall  no  less  listen  to  his 
complaint,  and  endeavor  to  settle  it  in  a  friendly  man- 
ner. If  an  English  merchant  have  occasion  to  address 
the  Chinese  authorities,  In-  shall  send  such  address  through 
the  consul,  who  shall  see  that  the  language  is  becoming; 
and  if,  otherwise,  will  dired  it  to  he  changed,  or  will  re- 
fuse to  convey  th<  If,  unfortunately,  any  dis- 

DUtes  take  place  of  such  a  nature  that  the  consul  can- 
not arrange  them  amicably,  thin  he  shall  request  t! 

sistance  of  a  Chinese  officer,  that  they  may  together  ex- 


290       IMPAIRMENTS  OF  SOVEREIGNTY 

amine  into  the  merits  of  the  case,  and  decide  it  equitably. 
rding  punishment  of  English  criminals,  the  English 
Government  will  enact  the  laws  necessary  to  attain  that 
end,  and  the  consul  will  be  empowered  to  put  them  in 
force;  and  regarding  the  punishment  of  Chinese  criminals, 
these  will  be  tried  and  punished  by  their  own  laws,  in  the 
way  provided  for  by  the  correspondence  which  took  place 
at  Nanking,  after  the  concluding  of  the  peace"18  (Art. 
13). 

In  the  subsequent  Treaty  of  1858.  which  confirmed  the 
Treaty  of  Nanking  and  abrogated  the  supplementary 
treaty  and  the  general  regulations  of  trade,  the  substance 
of  which  was  incorporated  in  the  treaty  in  question  (Art. 
1),  the  above  provision  was  consequently  likewise  abro- 
gated, but  its  substance  was  embodied  in  the  following 
Articles:19 

"Article  15.  All  questions  in  regard  to  rights,  whether 
of  property  or  person,  arising  between  British  subjects, 
shall  be  subject  to  the  jurisdiction  of  the  British  author- 
ities. 

"Article  16.  Chinese  subjects  who  may  be  guilty  of 
any  criminal  act  toward  British  subjects  shall  be  ar- 
rested and  punished  by  the  Chinese  authorities  accord- 
ing to  the  laws  of  China. 

"British  subjects  who  may  commit  any  crime  in  China 
shall  be  tried  and  punished  by  the  consul,  or  other  public 
functionary  authorized  thereto  according  to  the  laws  of 
Great  Britain. 

"Justice  shall  be  equitably  and  impartially  adminis- 
tered on  both  sides." 

The  British  having  thus  set  the  precedent,  the  United 
States  obtained  a  similar  privilege  by  the  Treaty  of 
Wanghia,  July  3,  1X44-'  (Arts.  21  and  25).  Similarly, 
Prance  obtained  the  same  concession  by  the  Treaty  of 
\\  hampoa,  October  24,  1844  »  (Arts.  25,  17.  28). 

Following  France  came  the  other  powers   which  ob- 


CONSULAR  JURISDICTION  291 

tained  the  privilege  of  extraterritoriality  by  their  respec- 
tive treaty  stipulations,  as  follows: 

Norway  and  Sweden,  March  20,  1847  (Arts.  21,  25 

29)22 

Russia,  June  13,  1858  (Art.  7).23 
Germany,  September  2,  1861  (Arts.  34,  35,  38,  39). 2 
Denmark,  Julv  13,  1863  (Arts.  15,  16,  17) r5 
Netherlands,  October  6,  1863  (Art.  6).-6 
Spain,  October  10,  1864  (Arts.  12,  13,  14). 27 
Belgium,  November  2,  1865  (Arts.  16,  19,  20). 28 
Italy,  October  26,  1866  (Arts.  15,  16,  I7)r° 
A i  stria-Hungary,  September  2,  1869  (Arts.  38,  39, 
40).30 

Peru,  June  26,  1874  (Arts.  12,  13,  14). 31 

v/au  October  3,  1881  (Arts.  9,  10,  ll).32 
Portugal,  December  1,  1887  (Arts.  47,  48,  51  ).33 
Japan,  July  21.  1896  (Arts.  20,  21,  22). 34 
Congo  Free  State,  Julv  10,  1898  (Art.  I).35 
Mexico,  December  14,  1899  (Arts.  13,  14,  15 ).36 
Sweden,  July  2,  1908  (Art.  10). 37 
Chile,  February  18,  1915.38 
Switzerland,  June  13,  1918.30-  40 

Passing  from  this  brief  sketch  of  extraterritoriality  in 
China,  we  now  come  to  the  exercise  of  extraterritorial 
jurisdiction  as  it  cxi>ts  in  China.  Willi  respect  to  the 
extent  of  extraterritorial  jurisdiction,  certain  principles 
can  be  deduced  from  the  treaty  provisions  stipulating  the 
extraterritorial  privilege.  If  the  dispute  is  wholly  of 
Chinese  parties  in  which  no  foreigners  are  involved,  the 
jurisdiction  belongs  exclusively  t<>  Chinese  courts,  and 
the  ca^-  should  be  settled  according  to  the  (  hinese  law 
and  procedure.  If  a  controversy  is  between  the 
parties  of  tin-  -aim-  treat]  Po  .  tr  enjoying  the  privi- 
■  :traterritoriality,  the  jurisdiction  lies  exclusively 

with    the    consular   and    other   courts    established    by    the 

treaty  Power  in  question,  and  the  case  i--  to  be  settled 

according  to  the  law  and  procedure  of  that  State.    It   the 


292        IMPAIRMENTS  OF  SOVEREIGNTY 

case  is  between  the  nationals  of  two  or  more  treaty  Pow- 
er- enjoying  the  privilege  of  extraterritorial  jurisdiction, 
the  jurisdiction  lies,  not  with  the  Chinese  courts,  but 
with  the  authorities  of  the  States  concerned  in  accordance 
with  agreements  they  have  made  covering  such  cases. 
If  the  controversy  is  between  the  parties  of  the  non- 
treaty  Power  and  the  treaty  Power,  the  jurisdiction  is 
determined  by  the  nationality  of  the  defendant  ;  if  he  is 
of  the  treaty  Power,  the  jurisdiction  is  in  the  courts  of 
the  treaty  Power  in  question ;  if  of  the  non-treaty  Power, 
the  jurisdiction  is  in  the  courts  of  China;  if  the  parties 
are  all  of  non-treaty  Powers,  the  jurisdiction  lies  wholly 
in  Chinese  courts.  If,  however,  a  controversy  is  between 
the  Chinese  and  the  nationals  of  the  treaty  Power,  the 
general  principle  governing  such  cases  is  that  the  juris- 
diction goes  with  the  nationality  of  the  defendant.  In 
other  words,  "the  plaintiff  follows  the  defendant  into 
the  court  of  the  latter's  nation."  41 

Thus  it  may  be  observed  that  extraterritorial  juris- 
diction follows  the  person  of  the  national.  In  other  words, 
it  is  personal,  and  follows  the  nationals  wherever  they 
go  or  reside.  It  is  not  alone  limited  to  the  settlements 
and  concessions  or  treaty  ports,  where  aliens  are  to  reside, 
but  it  extends  as  far,  and  as  wide,  as  the  nationals  go. 
It  can  therefore  be  said  that  the  extent  of  the  extraterri- 
torial jurisdiction  is  only  limited  by  the  realm  of  the  terri- 
torial sovereign,  or  to  employ  another  expression,  "it  is 
co-extensive  with  the  confines  of  the  Empire."  *2 

Further,  extraterritorial  jurisdiction  exempts  foreign 
nationals  enjoying  the  privilege,  not  only  from  the  ju- 
dicial process  of  local  tribunals,  but  also  from  the  liabil- 
ity of  search.  Their  houses  or  vessels  within  treaty 
ports  are  immune  from  search  by  territorial  authorities. 
Fugitives  from  law  hiding  in  these  houses  or  vessels 
can  be  extradited  only  "on  due  requisition  by  the  Chinese 
authorities,  addressed  to  the  British  consul."  43  In  1913, 
during  the  second  revolution,  the  Chinese  Government 


CONSULAR  JURISDICTION  293 

proposed  that  under  warrants  vised  by  the  consul,  the 
houses  and  vessels  of  foreigners  should  be  subject  to 
search,  thus  checking  any  collusion  between  the  Chinese 
and  foreigners,  but  the  proposal  was  rejected  as  being 
contrary  to  treaty  rights."  Thi<  privilege  of  immunity, 
however,  is  not  absolute.  It  does  not  mean  that  the 
nationals  can  so  abuse  the  privilege  as  to  defy  the  terri- 
torial laws  or  to  menace  public  health  or  public  safety, 
in  which  case  the  territorial  sovereign  will  have  the  right 
of  reasonable  restraint.'"' 

To  these  general  principles  governing  the  scope  and 
extent  of  extraterritorial  jurisdiction,  there  are  three  spe- 
cial exceptions.  First,  there  is  the  special  status  of  Ko- 
reans in  Chientao.  While  they  are  placed  on  an  equal 
footing  with  the  Chinese,  they  are  denied  the  full  privi- 
lege of  extraterritoriality,  and  are  accorded  only  a  limited 
or  diminished  form  of  extraterritorial  right.  Both  in 
civil  and  criminal  cases,  they  are  subject  to  Chinese  juris- 
diction, although  the  Japanese  consular  officers  may  be 
present  and,  in  case  of  injustice,  can  ask  for  a  new  trial. 
It  is  only  in  the  cases  concerning  the  lives  of  persons 
that  previous  notice  must  be  given  to  the  Japanese  offi- 
cer (Art.  4).48 

Second,  there  is  the  special  status  of  the  foreign  na- 
tionals in  Chinese  Government  service.  In  general,  they 
still  remain  within  the  extraterritorial  jurisdiction  of  their 
own  authorities.  In  particular  cases,  however,  they  are 
exempted.  In  acts  done  in  official  capacity,  they  may  not 
be  civilly  liable  in  consular  courts;41  and  in  criminal 
liabilities,  they  may  plead  the  act  oi  In  civil  em- 

ployment, when  they  arc  placed  under  discipline,  their 
superiors  have  the  authority   to  enforce  obedience.48      In 

military  service,  by  virtue  of  the  necessity  of  the  situa- 
tion, they  are  supposed  to  have  voluntarily   waived   their 

extraterritorial  protection  and  placed  themselves  under 
the  jurisdiction  of  the  territorial 
Third,  there  is  the  special  status  of  the  i  hinese  in  the 


204       IMPAIRMENTS  OF  SOVEREIGNTY 

employ  of  foreign  nationals.  As  a  rule,  they  are  still 
subject  i"  Chinese  jurisdiction  just  as  other  Chinese  citi- 
zens. They  are,  however,  not  to  be  arrested  without 
notice  to  the  consul  of  the  employer.01 

Apart  from  these  special  cases,  the  extraterritorial 
jurisdiction  is  nevertheless  subject  to  certain  limitations. 
These  are  numerous,  but  it  will  suffice  to  mention  the 
more  important  ones.  Limitations  can  arise  from  treaty 
provisions.  For  instance,  foreigners  violating  customs 
laws  are  subject  to  the  confiscation  of  their  vessels  and 
goods.52  Limitations  can  also  be  founded  on  interna- 
tional law.  In  accordance  with  well-established  rules 
of  interpretation,  extraterritorial  jurisdiction  being  a  dele- 
gated power,  the  unsurrendered  power  is  construed  to 
remain  intact  with  the  territorial  sovereign,  and  any 
doubt  as  to  the  grant  must  be  absolved  in  favor  of  the 
territorial  sovereign.  Under  this  construction,  nationals 
of  non-treaty  powers  or  of  treaty  powers  enjoying  no 
extraterritorial  privileges  are  subject  to  the  jurisdiction 
of  China.  Being  so,  they  cannot  claim  the  protection 
of  the  other  treat\-  powers  having  extraterritorial  privi- 
leges, nor  can  the  treaty  powers  claim  the  right  of  pro- 
tection.53 And  herein  lies  an  important  difference  be- 
tween the  practice  of  extraterritoriality  in  Turkey  and 
other  countries  of  the  Levant,  and  that  in  China.  In 
Turkey  and  other  states  of  the  Levant,  the  treaty  Po 
are  permitted  to  take  under  their  protection,  as  proteges, 
the  nationals  of  non-treaty  Powers,  but  in  China,  this 
right  does  not  exist.84 

Further,  the  exemption  from  the  jurisdiction  of  local 
courts  does  not  mean  exemption  from  obedience  to  local 
laws  and  municipal  ordinances.  The  nationals,  while 
enjoying  extraterritorial  rights,  are  still  bound  to  obey 
local  ordinances  for  public  health  and  ord( 

In  addition,  limitations  can  also  arise  from  statutes 
exiling  the  exercise  of  extraterritorial  jurisdiction.     The 


CONSULAR  JURISDICTION  295 

extraterritorial  courts,  exercising  the  delegated  power  and 
acting  under  the  direction  of  the  statutes,  are  subject  to 
the  limitations  set  by  legislation  or  treaty  stipulations. 
Even  though  the  act  may  be  within  the  extent  of  the 
extraterritorial  jurisdiction,  if  it  is  not  included  in  the 
statutes,  the  extraterritorial  jurisdiction  is  limited  to  that 
extent.66 

Finally,  as  the  extraterritorial  jurisdiction  is  personal, 
this  fact  in  itself  constitutes  an  inherent  limitation.  Con- 
sular courts  have  jurisdiction  only  over  their  respective 
nationals,  and  not  over  any  other  subjects.  Consequently, 
they  cannot  punish  Chinese  plaintiffs  for  perjury  or  con- 
tempt of  court,  nor  can  they  entertain  any  counter-claim 
or  set-off,  however  just  it  may  be. 

Having  seen  the  scope  and  the  limitations  of  extra- 
territorial jurisdiction,  we  now  proceed  to  the  extraterri- 
torial courts  that  are  vested  with  the  authority  to  exer- 
cise this  jurisdiction.  In  general,  all  consuls  of  the 
treaty  powers  are  authorized  to  exercise  extraterritorial 
jurisdiction,  such  courts  being  known  as  consular 
courts.  For  the  purposes  of  appeal  the  diplomatic  offi- 
cials at  Peking  arc,  in  the  main,  empowered  to  exer- 
cise appellate  jurisdiction,  but  in  the  case  of  Great  Britain, 
the  British  Supreme  Court  for  China  was  established  by 
the  Order  in  Council  of  October  24,  1904,ss  and  in  the 
case  of  the  United  States,  the  United  States  Court  for 
China  was  instituted  by  the  Act  of  June  30,  1906.69  bruin 
His  Britannic  Majesty's  Supreme  Court  for  China,  where 
more  than  £500  are  involved,  further  appeal  may  be  taken 
to  lli\  Majesty  in  Council,  and  in  other  cases,  the  Su- 
preme Court  may  give  leave,  as  it  sees  fit,  to  appeal  to 
the  Privy  Council.*0  From  the  United  States  Court  for 
China,  further  appeal  ran  be  taken  to  the  United  S 
Circuit  Court  of  Appeals  of  the  Ninth  Judicial  Circuit, 
and  from  thence  to  the  Supreme  Court  of  the  United 
States.81 


296       IMPAIRMENTS  OF  SOVEREIGNTY 

The  laws  applied  in  these  extraterritorial  courts  are  the 
laws  of  the  nations  exercising  the  extraterritorial  juris- 
diction. 

"So  long  as  the  laws  of  the  two  countries  differ  From 
each  other  there  can  be  but  one  principle  to  guide  judicial 
proceedings  in  mixed  cases  in  China,  namely,  that  the 
is  tried  by  the  official  of  the  defendant's  nationality  ; 
the  official  of  the  plaintiff's  nationality  merely  attending 
to  watch  the  proceedings  in  the  interest  of  justice.  If 
the  officer  so  attending  be  dissatisfied  with  the  proceed- 
ings, it  will  be  in  his  power  to  protest  against  them  in 
detail.  The  law  administered  will  be  the  law  of  the 
officer  trying  the  case"  (Art.  3,  Sec.  2,  The  British  Treaty 
of  Chefoo,  1876). 

With  respect  to  procedural  law,  there  is  a  general  agree- 
ment that  it  is  the  procedural  law  of  the  Powers  having 
extraterritorial  jurisdiction  that  is  applied.  With  ref- 
erence to  substantive  law,  however,  there  is  a  difference 
of  opinion.  Obviously,  foreigners  enjoying  extraterri- 
toriality should  be  adjudged  according  to  the  substantive 
law  of  their  own  countries;  and  yet,  as  they  are  in  duty 
bound  to  obey  local  laws  and  municipal  ordinances,  they 
must  also  be  adjudged  and  punished  according  to  the 
substantive  law  of  China.  On  the  one  hand,  it  is  there- 
fore maintained  that 02 

"while  it  may  be  admitted  that  justice  and  fair  deal- 
ing require  that  foreigners  offending  against  laws  rend- 
ered necessary  in  China,  as  well  as  elsewhere,  by  a  right 
regard  to  the  safety  and  convenience  of  the  communi- 
ties in  which  they  reside  and  of  the  government  upon 
whose  soil  they  stand,  should  be  punished  for  their  of- 
5,  it  appears  difficult  to  admit  the  broad  proposition 
that  they  arc  amenable  to  Chinese  law  in  the  same  sense 
as  natives  of  China  are,  or  in  point  of  fact,  in  any  sense 
which  would  allow  us  to  assent  to  the  Chinese  proposi- 
tion." 


CONSULAR  JURISDICTION  207 

On  the  other  hand,  it  is  contended  that 63 

"with  reference  to  the  Treaty  Powers  themselves,  it  may 
be  said  that  extraterritoriality  entitles  them  to  exercise 
so  much  authority  over  their  nationals  in  China  as  is 
necessary  to  enforce  effectively,  by  judicial  methods,  the 
laws  declared  to  be  in  force  by  the  Emperor  of  China." 

Despite  this  difference  of  opinion,  the  law  of  real 
estate  as  applied  in  the  extraterritorial  courts  is  well  set- 
tled, "it  i.>  a  fundamental  principle  of  all  systems  of 
jurisprudence  that  rights  of  realty  should  be  determined 
according  to  the  lex  situs."  04  It  is  consequently  decided 
that  the  law  governing  real  estate  in  China  should  be  the 
local  law  or  custom  of  China.  In  MacDonald  v.  Ander- 
son,05 Justice  Bourne,  delivering  the  opinion  of  the  Court, 
said : 

"I  hold  that  the  law  of  China  ought  to  be  applied  to 
the  facts  of  this  case.  The  Court  administers  the  law 
of  England  (1863  Order  in  Council,  Art.  5),  but  what 
is  the  law  of  England  in  regard  to  immovable  property 
situated  within  the  dominions  of  the  Emperor  of  China? 
Undoubtedly  rights  in  respect  of  such  property  shall  be 
governed  by  the  lex  situs,  that  is,  by  the  law  of  China." 

In  the  Chino-Japanese  Treaties  of  May  25,  1915,  it 
was  expressly  stipulated  that 

"mixed  civil  cases  between  Chinese  and  Japanese  relat- 
ing to  land  shall  be  tried  and  adjudicated  by  delegates  of 
both  nations  conjointly  in  accordance  with  Chinese  law 
and  local  usage"  (Art.  5).00 

Turning  to  the  Chinese  side  <>f  the  subject,  the  trib- 
unals that  have  jurisdiction  over  mixed  cases  between  a 
Chinese  defendant  and  a  foreign  plaintiff  have  been  com- 
monly known  as  "mixed  courts."  As  in  such  eases  the 
defendants  are  Chinese,  the  courts  having  jurisdiction 


298       IMPAIRMENTS  OF  SOVEREIGNTY 

are  Chinese  courts,  and  the  laws  applied  are  Chinese  laws, 
both  substantive  and  procedural.  A  foreign  as- 
however,  as  provided  in  the  treaties,  is  usually  permitted 
to  attend  the  trial.  He  is  usually  a  properly  authorized 
official  of  the  plaintiff's  nationality.  "He  shall  be  granted 
all  proper  facilities  for  watching  the  proceedings  in  the 
interest  of  justice.  If  he  so  desires,  he  shall  have  the 
right  to  present,  to  examine,  and  to  cross-examine  wit- 
nesses. If  he  is  dissatisfied  with  the  proceedings,  he 
shall  be  permitted  to  protest  against  in  detail."  07 

Among  the  so-called  "mixed  courts,"  the  Shanghai  In- 
ternational Mixed  Court  has  developed  to  be  a  unique  ex- 
ception. Originally  it  was  a  mixed  court  established  in 
the  International  Settlement  of  Shanghai,  for  the  trial 
of  cases  where  the  Chinese  are  defendants  with  the  at- 
tendance of  the  foreign  assessor  on  behalf  of  the  for- 
eign plaintiff.  In  such  cases  the  approval  of  the  assessor 
is  necessary  to  the  judgment  of  the  Court.08  Later,  how- 
ever, the  jurisdiction  of  the  Court  was  extended  to  cases 
where  both  or  all  of  the  parties  are  Chinese.  While  evi- 
dently it  is  contrary  to  the  treaty  stipulation  which  pro- 
vides that  the  foreign  assessor  can  attend  only  when  a 
foreigner  is  the  plaintiff,  the  extension  of  the  jurisdic- 
tion is  nevertheless  maintained  on  the  ground  that  it  is 
necessary  to  have  foreign  oversight  in  the  case  where  the 
parties  are  residents  of  foreign  settlements,  and  that  it  is 
essential  for  the  enforcement  of  municipal  ordinal 

Since  1911,  the  Shanghai  International  Mixed  Court 
has  assumed  a  new  status.  Because  of  the  Revolution 
and  the  temporary  collapse  of  Chinese  authority,  the 
court  was  taken  over  by  the  consular  body  of  Shanghai, 
including  the  prisons  attached  thereto.7"  Ever  since  the 
annexation,  the  court  has  remained  virtually  an  inter- 
national court  administered  by  the  consular  body  of 
Shanghai.  Negotiations  have  been  carried  on  for  its 
restoration,  but  so  far  no  agreement  has  yet  been 
reached.71 


CONSULAR  JURISDICTION  299 

Before  passing  from  the  system  of  extraterritoriality 
as  it  exists  in  China,  we  must  observe  some  unwarranted 
practices  committed  by  the  Treaty  Towers  under  the  aegis 
of  extraterritoriality  and  in  excess  of  such  jurisdiction, 
and  sometimes  in  apparent  defiance  of  China's  sover- 
eignty. First,  there  are  the  foreign  post-offices  established 
in  the  treaty  ports  by  the  Powers.  Their  establishment 
was  not  sanctioned  by  treaty  stipulations,  and  conse- 
quently it  is  an  infringement  on  the  sovereignty  of  China. 
"They  are  not  established  with  the  consent  of  China, 
but  in  spite  of  her.  .  .  .  Their  establishment  materially 
interferes  with  and  embarrasses  the  development  of  the 
Chinese  postal  service,  and  is  an  interference  with  Chinese 
sovereignty."  "2  Besides,  there  are  foreign  wireless  and 
telegraphic  installations  in  China  which  are  there  in  con- 
travention of  China's  sovereignty. 

Second,  there  are  police  boxes,  or  stations,  established 
by  Japan  in  Manchuria.  "Since  1905  the  Japanese  Gov- 
ernment has  established  and  gradually  extended  police 
agencies  in  Manchuria,  notwithstanding  the  repeated  pro- 
test of  the  Chinese  authorities.  The  number  of  such 
agencies,  as  reported  in  1917  by  the  local  authorities  of 
Fengtien  and  Kirin  Provinces,  has  reached  tv. 
seven."  n  The  establishment  of  these  police  boxes,  or 
Stations,  has  no  legal  justification.  While  China  has 
ted  to  the  maintenance  of  Foreign  police  in  conces- 
sions and  settlements  either  by  way  of  treaty  provisions 
or  "land  regulations,"  she  has  in  no  wise  ever 
her  sanction  to  the  stationing  of  a  police  force  elsewhere 
in  t!  c  territory  of  China.     (  Mi  the  other  hand,  Japan  has 

maintained  thai  the  establishment  of  police  is  but  a  corol- 
lary of  extraterritorial  jurisdiction.™ 

In  reply  to  this,  the  Chinese  Government  conte 
that  the  stationing  of  police  cannot  be  regarded  as  a  corol- 
lary of  extraterritoriality,  and  China  has  not   i 
the  legitimacy  of  the  measure,  but,  on  the  contrary,  has 

repeatedly  lodged  protests  againsl    it" 


300       IMPAIRMENTS  OF  SOVEREIGNTY 

Third,  there  is  the  maintenance  of  foreign  troops  in 
China.  While  there  are  troops  whose  presence  is  -auc- 
tioned by  treaties,  such  as  the  legation  guards  at  Peking 
and  the  Allied  guards  on  the  Peking-Mukden  Railway, 
whose  usefulness  and  raison  d'etre,  however,  has  ; 
beyond  the  original  purpose  of  their  maintenance,  there 
are,  nevertheless,  foreign  troops  stationed  in  China  en- 
tirely unauthorized  by  law  or  treaty,  and  in  violation  of 
China's  sovereignty.  In  Manchuria.  Russia  and  Japan 
stationed  railway  guards  on  the  Chinese  Eastern  Railway 
and  the  South  Manchuria  Railway,  to  which  the  Chinese 
Government  has  not  given  assent.76  Since  1909,  Japan 
has  stationed  troops  at  consulates  in  such  places  as 
Liutowkow  in  Fengtien,  and  Yenki  in  Kirin,  and  since 
1911  Russia  followed  suit  and  put  military  guards  at  con- 
sulates in  such  places  as  Kirin  and  Yenki.77  Upon  the 
outbreak  of  the  Chinese  Revolution  in  1911.  Japan  des- 
patched troops  to  Hankow,  800  miles  up  the  Yangtze 
Valley  and  in  the  very  heart  of  China,  and  has  since 
constructed  permanent  barracks  and  maintained  soldiers 
there,  despite  the  repeated  protests  of  the  Chinese  Gov- 
ernment. Upon  the  pretext  of  an  unfortunate  conflict 
in  1914  between  the  Chinese  police  operating  against 
bandits  at  Liaoyuan  on  the  border  of  Inner  Mongolia, 
and  a  company  of  Japanese  troops  passing  through  the 
place,  Japan  despatched  troops  there,  ami  notwithstand- 
ing the  settlement  of  the  case  to  the  satisfaction  of 
Japan,  she  has  not  yet  withdrawn  her  military 
Shortly  after  the  outbreak  of  the  World  War.  Japan 
seized  the  Tsingtao-Tsinan  Railway,  and.  stationing  mili- 
tary guards  along  it,  compelled  the  Chinese  troops  to 
withdraw  from  its  vicinity,  in  spite  of  the-  repeated  pro- 
of the  Chinese  Government  and  in  gross  violation 
of  China's  sovereignly.  At  Kashgar  in  Sinkiang,  Russia 
iince  1900,  maintained  ISO  soldiers  to  protect  the 
Russian  postal  agency,  and  Great  Britain  has,  since  1918, 
maintained  thirty  Indian  soldiers  in  the  same  city.7' 


CONSULAR  JURISDICTION  301 

Passing  from  this  brief  survey  of  the  practice  of  extra- 
territoriality in  China  with  the  unwarranted  practices 
under  its  aegis,  we  will  now  consider  the  recent  changes 
and  developments  connected  with  extraterritorial  juris- 
diction in  China.  On  account  of  the  declaration  of  war 
against  Germany  and  Austria-Hungary  in  1917,  the 
treaties  existing  between  the  Central  Powers  and  China 
have  been  abrogated,  and  with  the  abrogation  the  extra- 
territorial rights  once  enjoyed  by  the  Germans  and  the 
Austrians  have  been  duly  extinguished.  In  the  case  of 
Russia,  because  of  the  Soviet  revolution  and  the  subse- 
quent collapse  of  the  old  regime,  China  has  terminated 
all  relations  with  that  regime,  by  a  presidential  mandate 
of  September  23,  1920,70  withdrawing  recognition  from 
the  officials  of  the  old  regime  and  temporarily  taking 
over  the  interests  of  Russia  pending  the  eventual  estab- 
lishment of  a  stable  government  there.  During  this  in- 
terim, China  is  to  act  as  trustee  of  all  Russian  interests 
in  China,  and  the  the  extraterritorial  rights  hitherto  en- 
joyed by  the  Russians  remain  as  before.  Special  courts 
are  instituted  in  China  for  the  trial  of  cases  involving 
Russians,  and  Russian  counselors  are  to  be  employed 
to  advise  on  the  administration  of  justice  in  accordance 
with  Russian  laws. 

Having  completed  our  discussion  of  the  history  and 
practice  of  extraterritoriality  and  consular  jurisdiction  in 
China,  we  will  now  deal  with  the  defects  and  disadvan- 
tages of  the  system  with  a  view  to  its  eventual  aboli- 
tion.    Let  it  suffice  to  mention  the  main  one-  only.      The 

firsl  defect  is  the  conflict  of  consular  duties.  Vs  consul, 
he  must  protect  and  promote  the  interests  of  lu-  na- 
tionals. As  judge  in  extraterritorial  cases,  however,  lie 
is  obliged  to  observe  impartiality  and  administer  jus- 

\"t  infrequently,  either  because  of  bias  or  .i  pre- 
ponderance of  duties  as  protector  of  his  nationals'  in- 
terests, he  fails  to  do  justice.     "Such  a  practice  is  obvi- 


302        IMPAIRMENTS  OF  SOVEREIGNTY 

Olisly  contrary  to  the  modern  principle  of  the  separation 
of  administrative  and  judicial  functions.""0  Further, 
consuls  arc  frequently  not  well  versed  in  law,  and  be- 
cause of  this  limitation  in  training  are  often  unable  to 
administer  justice  adequately. 

The  second  defect  is  the  diversity  of  laws  applied.  The 
Chinese  apply  Chinese  law;  the  British,  British  law; 
the  French,  French  law ;  the  American,  American  law. 
As  a  consequence,  while  the  facts  may  be  the  same,  the 
law  applied  is  different  and  hence  the  decision  varies, 
giving  rise  to  the  evils  of  judicial  uncertainty  and  dis- 
parity of  judgment  and  punishment.81 

The  third  defect  is  the  lack  of  control  over  the  plaintiff 
and  the  witness.  The  jurisdiction  being  personal,  the 
Court  has  control  only  over  the  defendant  and  the  wit- 
ness of  the  defendant's  nationality.  If,  however,  the 
plaintiff  commits  perjury  or  contempt  of  court,  he  cannot 
be  proceeded  against.  Similarly,  if  the  witness  of  a  na- 
tionality different  from  that  of  the  defendant  should 
refuse  to  appear,  or,  after  appearance,  should  refuse  to 
testify  or  commit  perjury  or  contempt  of  court,  the  judge 
would  be  powerless  in  these  matters.  On  the  other  hand, 
should  the  defendant  have  a  counter-claim  or  set-off 
against  the  plaintiff,  no  matter  how  valid  it  might  be, 
the  Court  would  have  no  jurisdiction  over  such  cases, 
it  not  being  permitted  to  entertain  any  suit  brought  against 
the  plaintiff  who  is  not  of  his  nationality.  In  such  cases, 
the  defendant  will  have  to  resort  to  the  plaintiff's  court 
for  the  adjudication  of  the  counter-claim  or  set-off. 

The  fourth  defect  is  the  difficulty  in  obtaining  evidence 
for  cases  where  the  foreigner  commits  a  crime  in  the  inte- 
rior of  China.     In  accordance  with  the  treaty  provision, 


"if  he  be  without  a  passport,  or  if  he  commit  any  offense 
against  the  law,  he  shall  be  handed  over  to  the  nearest 
consul  for  punishment,  but  he  must  not  be  subjected  to 
any  ill-usage  in  excess  of  necessary  restraint."  62 


CONSULAR  JURISDICTION  303 

"This  rendered  into  plain  language  means  that  a  for- 
eigner who  commit-  a  rape  or  murder  a  thousand  miles 
from  the  seaboard  is  to  be  gently  restrained,  and  remitted 
to  a  consul  for  trial,  necessarily  at  a  remote  point,  where 
testimony  could  hardly  be  obtained  or  ruled  on."88  In 
consequence  of  this  arrangement  a  foreigner  committing 
a  crime  in  the  interior  is  to  -be  brought  to  the  nearest 
consul  who  may  be  many  miles  away  and  the  difficulty 
connected  with  obtaining  evidence  from  thousands  of 
miles  away  is  often  tremendous. 

The  fifth  disadvantage  is  that,  under  the  present  sys- 
tem of  extra-territoriality,  so  long  as  it  lasts,  it  is  prac- 
tically impossible  for  the  Chinese  Government  to  open 
up  the  whole  country  for  foreign  trade  and  residence. 
For  as  long  as  foreigners  carry  extra-territorial  immu- 
nity wherever  they  go  or  reside,  the  Chinese  Government 
will  be  hampered  in  administration  and  protection.  Thus, 
foreign  trade  will  be  limited  to  the  treaty  ports  and  the 
ports  voluntarily  opened  by  China,  and  cannot  therefore 
grow  as  rapidly  and  extensively  as  otherwise.  Put  in 
another  way,  extra-territoriality  is  a  real  hindrance  to 
the  extension  of  foreign  trade  in  China. 

In  view  of  these  serious  defects  and  disadvantages, 
the  abolition  of  extra-territorial  jurisdiction  has  become 
a  growing  aspiration  of  the  Chinese  Government.  Sev- 
eral Powers,  on  their  part,  have  already  consented  to  its 
relinquishment  pending  the  judicial  reform  to  be  under- 
taken by  China.  Article  12  of  the  Mackay  Treaty  of 
1902   stipulated: 

"China  having  expressed  a  strong  desire  to  reform 
her  judicial  system  and  bring  it  into  accord  with  that  of 
W  rtern  natioi  Britain  agrees  to  give  every  assist- 

ance to  such  reforms,  and  she  will  also  be  prepared  to 
relinquish  her  extra-territorial  rights  when  she  is  satis- 
lied  that  the  state  of  <  hine  •  laws,  the  arrangements  for 
their  administration,  and  other  considerations  warrant  her 
in  so  doing."  B8 


304        IMPAIRMENTS  OF  SOVEREIGNTY 

Similar  pledges  are  also  found  in  Article  15  of  the  Sino- 
American  Commercial  Treaty  of  1903,00  and  in  Article  11 
of  the  Sino-Japanese  Commercial  Treaty  of  the  same 
year.01 

The  Chinese  Government  on  its  part  has  taken  defi- 
nite steps  toward  its  eventual  abolition.  On  the  one  hand, 
it  has  refused  to  grant  the  privilege  to  the  states  recently 
sicking  treaty  relations.  It  has  been  reported  that  Greece, 
Poland,  Jugo-Slavia  and  Czecho-Slovakia  were  given  to 
understand  that  China,  in  view  of  judicial  reforms  re- 
cently undertaken  or  yet  in  process  of  adoption,  would 
not  henceforth  concede  any  extra-territorial  rights.02 
On  the  other  hand,  China  has  manifested  her  desire  for 
the  abolition  of  extra-territoriality.  At  the  Paris  Peace 
Conference,  the  Chinese  delegation  submitted  the  request 
for  the  relinquishment  of  extra-territoriality  and  con- 
sular jurisdiction.  The  request  was  made  that  upon  the 
fulfillment  of  the  following  two  conditions  which  the 
Chinese  Government  pledged  to  fulfill  by  the  end  of  1924, 
the  treaty  powers  would  surrender  their  extra-territorial 
rights : 

"1.  The  proclamation  of  a  Crin.inal,  a  Civil,  and  a 
Commercial  Code,  a  Code  of  Civil  Procedure,  and 
a  Code  of  Criminal  Procedure. 

"2.  The  establishment  of  new  courts  in  all  the  districts 
which  once  formed  the  chief  districts  of  the  old 
prefectural  divisions,  that  is  to  say,  in  fact,  in  all 
the  localities  where  foreigners  reside."  03 

Prior,  however,  to  the  abolition  of  extra-territorial 
jurisdiction,  and  to  remedy  some  of  the  existing  evils  of 
the  system,  the  Chinese  delegation  requested  the  imme- 
diate assent  of  the  Powers  to  the  two  measures : 

"1.  That  every  mixed  case,  civil  or  criminal,  where  the 
defendant  or  accused  is  a  Chinese,  be  tried  and 
adjudicated  by  Chinese  courts  without  the  presence 


CONSULAR  JURISDICTION  305 

or  interference  of  any  consular  officer  or  repre- 
sentative in  the  procedure  or  judgment. 
"2.  That  the  warrant  issued  or  judgments  delivered 
by  Chinese  courts  may  be  executed  within  the  con- 
cessions or  within  the  precincts  of  any  building 
belonging  to  a  foreigner,  without  preliminary  ex- 
amination by  any  consular  or  foreign  judicial 
officer."  04 

It  is  thus  clear  that  the  Chinese  Government  is  deter- 
mined to  abolish  extra-territoriality  and  consular  juris- 
diction in  China,  and  that  it  is  making  every  effort  toward 
that  end.  It  is  also  to  be  observed  that  the  success  of 
this  measure  will  benefit  not  only  China  by  restoring  to 
her  extra-territorial  jurisdiction,  but  also  the  Powers  by 
the  opening  of  the  whole  of  China  to  foreign  trade  and 
residence. 


NOTES  TO  CHAPTER  XVIII 

1.  Fiore's    International    Law    Codified,    translated    by    E.    M. 
Borchard,  p.  208. 

2.  J.  B.  Moore,  Internatl.  Law  Digest,  Vol.  2,  p.  593. 

3.  Oppenheim,  Internatl.  Law,  3rd  ed.,  Vol.  1,  p.  606. 

4.  Hertslet's  China  Treaties,  Vol.  1,  No.  76,  p.  438. 

5.  Hertslet,  ibid.,  No.  77,  p.  445. 

6.  Hertslet,  ibid.,  VoL  1,  No.  7K,  p.  447. 

7.  Hertslet,  ibid.,  Vol  1,  No.  79.  p.  451. 

8.  II.  rtslet,  ibid.,  Vol.  1.  No.  81,  p.  459. 

9.  State  Papers.  Vol.  62,  pp.  322-323. 

10.  Hertslet.  op.  cit..  Vol.  1,  X-..  <>-',  p.  365. 

11.  Hertslet,  ibid.,  Vol.  l.  No.  64,  p.  379;  State  Papers,  Vol. 
88,  pp.  47X-471'.  Arts.  20,  21  and  22. 

12.  Hertslet,  ibid.,  Vol.  1.   No.  37,  p.  244;  State  Papers,  Vol. 
92.  p.  I'M')  el  seq. 

13.  I.  I'..  Moore,  Internatl.  law  hi:'.  Vol.  2.  p.  (.44. 

14.  State    Papers,    Vol.  20,   p.  ^^  ["he   Status   of   .Minis 
in  (  liina,  p.  '>5  r\  seq. 

15.  Journal  of  House  of  Commons,  Vol.  93,  p.  476;  Koo,  op. 

cit..  p.   1  12  it   si  .| 

16.  [bid.,  p.  112. 

17.  St.t,    Pa]         Vol.  30,  p.  398  et  seq.;  The  Shantung  I 
tion,  presented  by  the  (him  i    Peace   Delegation  t.>  tin-   Paris 

Conference,  1919,  published  by  tin.-  Chinese  Natl.  Welfare 


306       IMPAIRMENTS  OF  SOVEREIGNTY 

Soc,  p.  92;  Questions  for  Readjustment,  submitted  by  Cbina  to 
I  Conference,  App.  1,  p.  35. 

18.  State  Papers,  Vol  .;,). 

19.  Hertslet,  op.  cit,  Vol.  1,  No.  6,  p  18  et  seq.;  State  Papers, 

r   Readjustment,  submitted  by 
Cbina  to  die  Peace  Conference,  App.  1,  p.  35.    Also  see  Art  17. 

20.  Stan  p.  791  et  seq.,  Arts.  21  and  25; 
Questions  for  Readjustment,  p.  36,  App.  2. 

21.  Hertslet,  op.  cit.,  \  .39,  p.  258  et  seq.;  Questions 
for  Readjustment,  p.  37.  App.  3. 

22.  Hcrtslet,  Vol.  1,  No.  93,  p.  527 

23.  Hertslet,  Vol.  1,  No.  81,  p.  455  et  seq. 

24.  Hertslet,  Vol.  1,  No.  56,  p.  331  et  seq. 

25.  Hertslet,  Vol.  1,  No.  38,  p.  249  et  seq. 

26.  Hertslet,  Vol.  1,  No.  70,  p.  407  et  seq. 
17.    Hertslet,  Vol.  1,  No.  91,  p.  512  et  seq. 

28.  Hertslet,  Vol.  1,  No.  34,  p.  223  et  seq. 

29.  Hertslet,  Vol.  1,  No.  60,  p.  354  et  seq. 

30.  Hertslet,  Vol.  1,  No.  33,  p.  215  et  seq. 

31.  Hertslet,  Vol.  1,  No.  71.  p.  415  et  seq. 

32.  Hertslet,  Vol.  1,  No.  35,  p.  234  et  seq. 

33.  Hertslet,  VoL  1.  X".  73,  \>.  423  et  seq. 

34.  Hertslet,  Vol.  1,  No.  64,  p.  373  et  seq. 

35.  Hertslet,  Vol.  1,  No.  36,  p.  240  et  seq.:  Article  One  pro- 
vides that  '"all  privileges  of  person,  property,  and  jurisdiction 
enjoyed  by  foreign  nations  under  the  Treaties  concluded  by 
Cbina  shall  from  henceforth  be  granted  to  the  Congo  Free 
State."  If  the  word  "jurisdiction  as  used  herein  means  to 
include  extraterritorial  jurisdiction,  then  the  privilege  is  herewith 
granted  ;  otherwise  it  is  not  granted. 

36.  Hertslet,  VoL  1.  No.  69,  p.  399. 

37.  MacMurray,  Treaties  and  Agreements  With  or  Concern- 
ing China,  1908/11;  State  Papers.  Vol.  101,  p.  945  et  seq. 

38.  MacMurray,  1915/2. 

39.  MacMurray,  1918/8. 

40.  It  is  reported  that  Bolivia  has  recently  entered  into  treaty 
relations  with  China.  It  is  that  Greece,  Jugo- 
slavia, Czecho-SIovakia  and  Poland  have  made  approach  to  the 
Chinese  Government  but  have  been  given  the  understanding  that 
China  will  not  henceforth  grant  any  extra-territorial  jurisdiction. 
Sec  II.  K.  Tong's  articles,  Extra-Territoriality  and  the  New 
Nations,  Millard's  Review,  Oct  25,  1919,  p.  314  et  se<| .,  and  Has 
Extra-Territorialitv  Outlived  Its  Useft  ^Hard's  Review, 
Dec.  13,  1919,  p.  56  et  seq. 

41.  Koo,  op.  cit.,  p.   17'>.     For  a  summary  territorial 
jurisdiction,  see  W.  W.  Willoughby,  Foreign  Rights  and  Inter- 
in  (  hina,  p.  23  et  sen. 

42.  Koo,  op.  cit.,  p.  195. 

43.  Hcrtslet,  Vol.  1,  No.  6,  p.  25,  British  Treaty  of  1858,  Art. 
21. 

44.  China,  1914,  No.  1,  p.  46. 


CONSULAR  JURISDICTION  307 

45.  Oppcnhcim,  Intcrnatl.  Law,  Vol.  1,  3rd  Ed.,  p.  570. 

46.  MacMurray,  1909/10. 

47.  Tyau,  Trcatv  Obligations  between  China  and  Other  States, 
p.  43. 

48.  The  Case  of  Edward  Page,  U.  S.  For.  Rel.,  1881,  p.  257; 
Koo,  op.  cit.,  pp.  194-195. 

49.  Tvan,  op.  cit.,  p.  4.i. 

50.  The  Case  of  Genl.  Bur  Up.  Cor.,  1865,  Vol.  2,  p. 
462;  Tyau,  op.  cit,  pp.  43-44;  U.  S.  Citizens  in  Proposed  Attack 
on  I    •                             Rel,  1874,  p.  332, 

51.  The  Case  of  Chang  Chung-Hsuan  and  Yu  Kai-Ping,  U.  S. 
For.  Rel.,  19(H),  pp.  394-4 

52.  Hertslet,  Vol.  1,  No.  6,  pp.  32-33,  Art.  47,  48,  49,  British 
Treaty  of  1858. 

53.  "U.  S.  For.  Rel.,  1909,  pp.  68-70;  1910,  p.  839. 

54.  The  Case  of  the   New    Grenada  Citizen,  U.  S.  For.  Rel., 

1873,  Vol.  1,  p.  139;  the  Case  of  Japanese  Subjects  during  Chino- 
Japanese  War,  J.  B.  Morse,  Intcrnatl.  Law  Dig.,  Vol.  4,  pp. 
601-603. 

55.  The  Case  of  Japanese  Hunting  Regulations,  U.  S.  For. 
Rel.,  1874,  p.  653;  the  Chinese  Circular  of  1878,  the  Tsungli 
Yamen  to  the  Chinese  Ministers  Abroad,  U.  S.  For.  Rel.,  1880-81, 
p.  178. 

56.  Sir  John  F.  Davis  to  British  Consuls  in  China,  Xov.  22, 
1844,  Parliamentary  Papers,  1847.  XXXX,  China,  No.  795,  p.  38; 
Koo,  op.  cit.,  p.  203 ;  Case  of  Walter  Jackson,  U.   S.  For.  Rel., 

1874,  pp.  338,  347. 

57.  A.  M.  Latter,  The  Government  of  the  Foreigners  in 
China,  19  Law  Quarterly  Review,  1903,  pp.  316-325;  Koo,  op. 
cit.,  p.  211. 

58.  State  Papers,  Vol.  97,  p.  150  et  seq. 

59.  34  .statu;,  s  a-  Large,  p.  814. 

60.  Cf.  W.  W.  Willoughby,  op.  cit.,  p.  35  et  seq. 

61.  W.  W.  Willoughby,  ibid.,  p.  33  et  seq. 

62.  Seward,  American  Minister  at  Peking,  to  State  Depart- 
ment, U.  S.  Foreign  Relations,  1880,  p.  14'). 

63.  Koo,  op.  cit.,  p.  217. 

64.  W.  \V.  Willoughby,  op.  at,  p.  4c 

65.  I  .  American  Consular  Jurisdiction  in  the  Orient, 
pp.  250-J53 ;  W.  W.  Willoughby.  <>p.  cit..  p.  46  et  seq. 

66.  The  Sino-Japanesi  tions.  1915,  p.  56. 

67.  Art.  4,  Sino-Ameri  ity,  Nov.  17,  1880,  Hcrt,  No. 
98,  p. 

68.  Morse,  Trade  and  Administration  of  China,  p.  200. 
Morse,  ibid.,  p.  200  1 1 

70.  Tin  Pro<  lamation  of  I  r  Body,  Nov.  10,  1911, 
W.  \V.  Willoughby,  op.  <  it.,  pp.  mi  61. 

71.  II.  I..  Toi  article  on  the  Shanghai  Mixed  Court  and  the 
Settlement   !  m,  Millard's  Ri  ..  15,  1919,  p.  445. 

11.  Minister  Conger  t<>  Secretary  Hay,  U.  S.  For,  ReL,  1902, 
P   J_'5 ;  Tyau,  op.  cit.,  p.  53. 


308        IMPAIRMENTS  OF  SOVEREIGNTY 

73.  The  Shantung  Question,  presented  hy  China  to  the  Paris 
Peace  Conference,  published  hy  the  Chinese  Xat.  Welfare  So- 
ciety, 1920,  p.  74. 

74.  Aide  M£moire,  Japanese  Minister  to  the  Chinese  Minister 
of  Foreign  Affairs,  Oct.  18,  1916,  MacMurray,  1917/2;  W.  W. 
Willoughby,  op.  cit.,  pp.  83-85. 

75.  MacMurray,  1917/2;  \V.  \V.  Willoughby,  op.  cit,  p.  86; 
The  Shantung  Question,  op.  cit,  p.  75. 

76.  For  a  full  statement  of  the  case,  see  Questions  for  Read- 
justment, Submitted  by  China  to  the  Peace  Conference,  p.  4  et 
seq. 

77.  Questions  for  Readjustment,  ibid.,  p.  6. 

78.  For  a  full  account  of  the  foreign  troops  in  China,  see 
Questions   for  Readjustment,  ibid.,  pp.  4-7. 

79.  Millard's  Review,  Oct.  9,  1920,  pp.  281-282. 

80.  Questions  for  Readjustment,  op.  cit,  p.  16. 

81.  De  Menil  Case,  U.  S.  For.  Rel.,  1909,  pp.  55-64;  Tyau,  op. 
cit.,  p.  55. 

82.  Hertslct,  Vol.  1,  No.  6,  p.  22,  Article  9,  British  Treaty  of 
1858. 

88.  Minister  Read  to  Secretary  Cass,  1859,  Sen.  Doc.  No.  30, 
Vol.  10,  36th  Congress,  First  Session,  pp.  382,  384. 

89.  Hertslet,  Vol.  1,  No.  28,  p.  182. 

90.  Hertslet,  Vol.  1,  No.  100,  p.  575. 

91.  Hertslet.  Vol.  1,  No.  66,  pp.  386-387. 

('J.  H.  K.  Tong's  articles,  Extra-territoriality  and  New  Na- 
tions, Millard's  Review,  Oct.  25,  1919,  p.  314  et  seq.;  Has  Extra- 
territoriality Outlived  Its  Usefulness,  Millard's  Review,  Dec.  13, 
1919,  p.  56  et  seq. 

93.  Questions  for  Readjustment,  op.  cit.,  p.  17. 

94.  Ibid.,  p.  17. 


XIX 
CONCESSIONS  AND  SETTLEMENTS 

Passing  from  extra-territoriality  and  consular  juris- 
diction, we  now  come  to  another  form  of  impairment  of 
China's  sovereignty,  the  foreign  concessions  and  settle- 
ments. As  these  terms  are  often  used  interchangeably, 
it  is  not  safe  to  attempt  to  distinguish  them,  and  so 
suffice  it  to  state  that  by  concessions  and  settlements  are 
meant  the  areas  reserved  for  foreign  residence  where 
foreign  communities,  either  through  their  consuls  or 
their  municipal  councils,  constitute  self-governing  bodies 
politic. 

The  origin  of  concessions  and  settlements  dates  back 
to  the  opening  to  foreign  trade  and  residence  of  the  five 
parts  at  Canton,  Anioy,  Foochow,  Ningpo,  and  Shanghai 
in  1842  and  to  the  setting  aside  of  certain  reserved  areas 
for  foreign  residence  and  trade  as  provided  in  the  Sup- 
plementary Treaty  of  1843  (Art.  7).1 

"The  Treaty  of  Perpetual  Peace  and  Friendship  pro- 
vrides  for  British  subjects  and  their  families  residing  at 
the  cities  and  towns  of  Canton,  Foochow,  A.moy,  Ningpo, 
and  Shanghai,  without  molestation  or  restraint.  It  is 
accordingly  determined  that  ground  and  houses,  the  rent 
or  price  of  which  is  to  be  fairly  and  equitably  arranged 
for,  according  to  rates  prevailing  amongsl  the  people 
withoul  exaction  on  either  side,  shall  be  set  apart  by 
the  local  officers  in  communication  with  the  consul.  .  .  ." 

The  origin  of  local  self  governmenl  dates  back  to  the 
land  regulations  made  by  the  treaty  powers  with  a  con- 
currence of  the  Chinese  authorities.  For  instance,  the 
land  regulations  of  1845  governing  the  Shanghai  settle 

309 


310       IMPAIRMENTS  OF  SOVEREIGNTY 

ment  was  made  with  the  approval  of  the  Chinese  author- 
ity, and  gave  foreign  renters  the  power  and  duty  "to 
build  and  repair  the  stone  and  wooden  bridges,  keep  in 
order  and  cleanse  the  streets  and  road-,  put  up  and  light 
street  lamps,  establish  tire  engines,  plant  trees  to  protect 
the  roads,  open  ditches  to  drain  olT  the  water,  and  hire 
watchman"  (Art.  12).-'  In  the  Land  Regulations  of  1866- 
1869  governing  the  Foreign  Settlements  of  Shanghai, 
north  of  Yangkingpang,  the  preamble  read  in  part: 

"Whereas  certain  regulations  .  .  .  were  settled  and 
agreed  upon  by  the  Representatives  of  England,  France, 
and  the  United  States  of  America,  ...  in  communica- 
tion with  his  Excellency  Woo,  the  chief  local  authority 
representing  the  Chinese  Government  at  Shanghai ;  "  -A 

And  as  concessions  and  settlements  became  recognized 
and  established  self-governing  communities,  treaty  stipu- 
lations were  provided.  For  instance.  Article  1  of  the 
protocol  between  China  and  Japan  respecting  Japanese 
settlements  and  other  matters  3  reads : 

"It  is  agreed  that  settlements  to  be  possessed  exclu- 
sively by  Japan  shall  be  established  at  the  towns  and 
ports  newly  opened  to  trade.  The  management  of  roads 
and  local  police  authority  shall  be  vested  solely  in  the 
Japanese  consuls." 

There  are  four  kinds  of  concessions  and  settlements  in 
China.  The  first  is  the  concession.  It  is  a  reserved  area 
granted  in  perpetual  lease  by  the  Chinese  Government  to 
the  treaty  power  interested  for  the  residence  and  trade 
of  its  nationals  and  with  the  delegated  power  to  admin- 
ister the  municipal  government  thereof,  such  as  the  con- 
cessions in  Hankow  and  Tientsin.  The  second  kind  is 
the  settlement.  It  is  the  reserved  area  set  aside  by  the 
Chinese  Government  for  the  residence  and  trade  of 
foreigners  where  they  are  permitted  to  organize  them- 
selves into  a  municipality  for  self-government,  but  it  is 


CONCESSIONS  AND  SETTLEMENTS      311 

not  a  lease  in  perpetuity  to  the  foreign  Power  concerned, 
such  as  the  International  Settlement  of  Shanghai.  The 
third  kind  is  the  settlement  in  the  ports  voluntarily 
opened  by  China.  It  is  an  area  set  apart  for  interna- 
tional settlement  where  the  municipal  administration  is 
still  in  the  hands  of  the  Chinese  authorities.  The  fourth 
kind  is  the  settlement  by  sufference.  It  is  "one  within 
which  the  residents  have  acquired  without  any  formal 
agreement  on  the  part  of  the  territorial  sovereign,  the 
tacit  right  to  govern  themselves  as  a  municipality,"4  such 
as  the  settlement  in  Chefoo.6 

The  local  government  in  the  concessions  and  settle- 
ment varies  from  the  rule  by  the  consul  of  the  treaty 
power  concerned  as  sole  administrator  to  the  government 
by  a  municipal  council  elected  by  the  rate  payers  residing 
therein.  In  the  Japanese,  Belgian,  and  Italian  concessions 
of  Tientsin,  the  consul  is  the  sole  administrator.0'7"8  In 
the  French  concession  of  Tientsin,  the  municipal  control 
lies  in  a  council  composed  of  the  consul  as  ex-officio 
president,  and  six  land  owners  paying  the  highest  taxes 
and  three  tenants  paying  the  highest  rents.0  In  the 
British  concession  of  Tientsin,  the  power  is  vested  in  the 
consul  as  de  jure'  and  ex-ofhcio  ruler,  and  in  the  munici- 
pal council  elected  by  a  vote  of  land  renters.  The  British 
consul  has  the  power  of  approval  over  all  actions  of  the 
municipal  council,  presides  over  annual  and  special  meet- 
ings, and  lias  jurisdiction  in  all  questions  of  landed  prop- 
erty and  in  which  "a  non-British  European  is  not 
defendant."10 

In  the  International  Settlement  of  Shanghai,  the-  local 
government  is  based  on  the  land  regulations  of  L866  1869 

as  last  amended  and  passed  by  the  I  oreign  Ministers  in 

Peking,  which  with  certain  modifications  constitute  the 

ruling  charter  of  the  Shanghai  International  settlement.11 

The  government  is  vested  in  the  municipal  council  con- 
sisting of  not  mure  than  nine  and  no  less  than  five  coun- 


312       IMPAIRMENTS  OF  SOVEREIGNTY 

cilors  elected  annually  by  a  popular  vote  of  the  foreign 
land  renters  and  rate  payers.  The  electorate  consists  of 
every  foreigner  "having  paid  all  taxes  due,  and  being  an 
owner  of  land  of  not  less  than  500  taels  in  value,  whose 
annual  payment  of  assessment  on  land,  or  houses,  or 
both,  exclusive  of  all  payments  in  respect  of  licenses, 
shall  amount  to  the  sum  of  ten  taels  and  upwards,  or 
who  shall  be  a  householder  paying  on  an  assessed  rental 
of  not  less  than  500  taels  per  annum  and  upwards  .  .  ." 
(Art.  19).  The  electorate  meets  at  least  once  a  year, 
and  as  often  as  necessary,  at  the  notice  of  the  consuls,  to 
hear  the  reports  of  the  past  year,  to  consider  the  budget 
for  the  next  year,  and  to  authorize  taxation  and  assess- 
ment (Art.  9).  The  municipal  council  is  vested  with 
the  executive  power  of  the  municipality.  It  elects  its 
own  chairman  and  vice-chairman  (Art.  21)  and  appoints 
committees  out  of  its  own  members,  "for  all  or  any  of 
the  purposes  wherein  they  were  empowered  to  act" 
(Art.  23).  The  municipal  council  can  be  sued  only 
through  the  "Court  of  Consuls"  established  at  the  be- 
ginning of  each  year  bv  the  whole  body  of  treaty  consuls 
(Art.  27). 

The  judicial  power  over  foreigners  is  vested  in  extra- 
territorial consular  courts,  and  the  judicial  power  over 
the  Chinese,  or  the  mixed  cases  where  the  Chinese  are 
defendants,  is  vested  in  the  mixed  courts.  "No  arrests 
can,  as  a  general  rule,  be  made  except  upon  the  warrant 
of  the  proper  court,  and  in  case  of  the  mixed  court 
countersigned  by  the  Senior  Consul.  Since  1911  the 
execution  of  mixed  court  summons  and  warrants  has  been 
intrusted  to  the  municipal  police."  '- 

The  landholding  in  concessions  and  settlements,  again, 
varies  with  different  localities.  In  concessions,  such  as 
Hankow,  foreigners  obtain  their  titles  to  land  from  their 
consuls  and  must  register  their  deeds  with  their  own  con- 
sulates.i:t  The  Chinese  are  not  supposed  to  hold  land, 
but  in  practice  they  do  so  under  the  name  of  foreigners.14 


CONCESSIONS  AND  SETTLEMENTS      313 

In  the  international  settlement  of  Shanghai  foreigners 
must  acquire  the  land  from  the  original  owner,  taking 
from  him  the  title  deed  and  the  tax  receipts.  Through 
their  own  consulates  they  must  then  apply  to  the  Chinese 
land  office  for  new  title  deeds.  Three  copies  of  the  new 
title  deed  are  required,  one  to  be  deposited  with  the  con- 
sulate, one  to  be  kept  by  the  new  owner,  and  one  to  be 
filed  with  the  Chinese  land  office,  whose  seal  gives  the 
final  validity.1"  Further,  they  are  not  to  acquire  fee 
simple  title  deeds,  but  can  hold  land  in  perpetual  leases. 
In  the  ports  voluntarily  opened  by  China,  they  must  reg- 
ister their  deeds  with  the  Chinese  authorities  and  are 
not  allowed  to  acquire  a  lease  for  a  term  longer  than 
thirty  years.18 

The  legal  status  of  concessions  and  settlements  has 
become  quite  definite  and  determined.  Although  under 
the  municipal  control  of  the  consul  or  the  council,  the 
area  is  still  considered  Chinese  territory,  over  which 
China's  sovereignty  remains  unsurrendered.  What  for- 
eigners acquire  thereby  is  the  delegated  power  of  mu- 
nicipal administratoin,  while  the  reserved  powers  lie  intact 
with  the  sovereign  grantor.  For  example,  it  is  stipu- 
lated : 1T 

"His  Majesty  the  Emperor  of  China,  being  of  the 
opinion  that,  in  making  concessions  to  the  citizens  or 
subjects  of  foreign  Powers  of  the  privilege  of  residing 
on  certain  tract-,  (if  land,  or  resorting  to  certain  waters 
of  that  empire  for  purposes  of  trade,  he  has  by  no  means 
relinquished  his  right  of  eminent  domain  or  dominion 
over   said   land   and   waters,    hereby   agrees.  ...  It    is 

further  agreed  that,  if  any  right  or  interest  in  any  tract 

of  land  in  (  hina  has  been  or  .shall  hereafter  be  granted 
by  the  Government  of  China  to  the  United  States  or  their 

citizens  for  purposes  of  trade  or  commerce,  that  grant 
shall  in  no  event  he  construed  to  divest  the  Chinese  au- 
thorities of  their  right  of  jurisdiction  over  persons  and 


314       IMPAIRMENTS  OF  SOVEREIGNTY 

property  within  the  said  tract  of  land,  except  so  far  as 
that    right    may    have    been    expressly    relinquished    by 

treaty." 

Exercising  the  unsurrendered  jurisdiction,  the  Chinese 
Government  exacts  an  annual  land  tax  on  the  concessions 
from  the  Powers;  and  collects  land  tax  from  foreigners 
holding  real  estate  in  the  settlements.  Again,  as  an  ex- 
ercise of  sovereignty,  she  maintains  her  judicial  tribunals 
in  the  concessions  and  settlements.  In  the  case  of  for- 
eigners, she  delegated  the  power  to  the  consuls  by  the 
grant  of  extra-territorial  jurisdiction;  in  the  case  of 
Chinese,  she  establishes  native  courts  or  mixed  courts  for 
the  trial  of  cases  in  which  the  Chinese  are  defendants. 

Again,  as  incident  to  her  sovereignty,  China  reserves  the 
power  to  declare  neutrality  of  these  concessions  and  set- 
tlements in  time  of  war,  allowing,  however,  the  right  of 
self-defense  in  case  of  a  hostile  attack.  As  an  illustra- 
tion, it  is  provided:18 

".  .  .  No  such  concession  or  grant  shall  be  construed  to 
give  to  any  Power  or  party  which  may  be  at  war  or  hos- 
tile to  the  United  States  the  right  to  attack  the  citizens 
of  the  United  States  or  their  property  within  the  said 
land  or  waters,  and  the  United  States,  for  themselves, 
hereby  agree  to  abstain  from  offensively  attacking  the 
citizens  or  subjects  of  any  Power  or  party  or  their  prop- 
erty with  which  they  may  be  at  war  on  any  such  tract 
of  land  or  waters  of  the  said  empire.  But  nothing  in 
this  Article  shall  be  construed  to  prevent  the  United 
States  from  resisting  any  attack  by  any  hostile  Tower  or 
party  upon  their  citizens  or  their  property." 

Further,  as  territorial  sovereign,  China  may  take  what- 
ever measure  regarding  the  concessions  and  settlements 
in  time  of  war  as  are  necessary  for  her  own  safety.  She 
may  close  the  ports  for  military  necessity,  whatever  may 
be  the  number  of  foreign  settlements  and  concessions 
located  therein.    To  deny  the  territorial  sovereign  of  this 


CONCESSIONS  AND  SETTLEMENTS      315 

right  of  self-defense  is  to  deny  her  of  the  right  of  inde- 
pendence and  self-preservation.  It  is  to  be  understood, 
however,  that  as  soon  as  the  military  necessity  has  dis- 
appeared, closure,  or  any  other  measure  of  self-defense, 
must  be  forthwith  removed.  Thus,  in  the  Sino-French 
War  of  1885,  China  closed  Canton  where  there  were 
foreign  settlements  or  concessions,  which  was  acquiesced 
in  by  the  Powers.  Subsequently,  after  the  war,  the 
United  States,  while  protesting  against  the  delayed  re- 
moval of  the  obstructions,  nevertheless  admitted  the  right 
of  China  to  take  due  measures  of  self-defense. 

"It  is  unquestionable  that  a  belligerent  may,  during 
the  war,  place  obstructions  in  the  channel  of  a  belligerent 
port,  for  the  purpose  of  excluding  vessels  of  the  other 
belligerent  which  seek  the  port  either  as  hostile  cruisers 
or  as  blockade-runners.  .  .  .  But  while  such  is  the  law, 
it  is  equally  settled  by  law  of  nations  that  when  war  ceases 
such  obstructions  .  .  .  must  be  removed  by  the  territorial 
authorities."  10 

Besides,  because  of  the  unsurrendered  sovereignty,  the 
Chinese  residing  in  the  concessions  and  settlements  are 
still  under  obligation  to  render  allegiance  to  the  Chinese 
Government.  While  in  a  limited  sense  they  are  under 
the  jurisdiction  of  the  municipal  council  or  consul,  in 
consequence  of  which  they  are  not  liable  to  arrest  by 
Chinese  authorities  except  with  the  consent  of  the  consul 
or  council,  it  is  nevertheless  decided  that,  except  in  the 
respects  wherein  China  has  by  treaty  or  otherwise  dele- 
gated her  power  of  jurisdiction  to  the  local  government, 
they  are  still  under  the  jurisdiction  of  the  Chinese  Gov- 
ernment. For  instance,  in  1862,  the  Shanghai  taotai 
attempted  to  levy  an  impost  upon  the  Chinese  in  the 
British  settlement  and  asked  the  cooperation  of  the 
British  consul.  The  latter  refused  to  cooperate,  but  the 
British  Minister  repudiated  the  refusal  and  conceded  the 
request,  saying: 


316        IMPAIRMENTS  OF  SOVEREIGNTY 

"The  Taotai  is  entitled  to  levy  taxes  as  he  pleases; 
and  as  long  as  he  merely  seeks  to  impose  taxes  on  per- 
sons resident  in  the  concession,  which  are  paid  by  those 
in  the  city  or  suburb,  I  see  no  reason  for  objecting  to  it, 
at  a  time  when  it  is  our  inter.  ell  as  that   of  the 

Chinese  that  the  Government  shall  not  be  deprived  of  its 
resources." 

This  view  was  supported  by  Earl  Russell,  who  added: 

"The  lands  situated  within  the  limits  of  the  British 
settlement  are  without  doubt  Chinese  territory,  and  it 
cannot  reasonably  be  held  that  the  mere  fact  of  a  resi- 
dence within  these  limits  exempts  Chinese  subjects  from 
fulfilling  their  natural  obligations."  20 

In  addition,  the  grant  being  by  lease  or  voluntary  reser- 
vation for  the  residence  and  trade  of  foreigners,  there  is 
the  implied  condition  or  obligation  on  the  part  of  for- 
eigners to  use  the  settlements  or  concessions  only  under 
the  condition  of  quiet  enjoyment.  Should  the  foreign 
communities  at  any  time  prove  to  be  inimical  to  the 
welfare  and  safety  of  the  sovereign  grantor,  the  terri- 
torial sovereign  can  abate  the  nuisance  or  impose  due 
restraint.  To  deny  him  this  right  is  to  deprive  him,  not 
only  of  the  right  of  self-defense,  but  also  the  right 
of  a  landlord  or  territorial  sovereign  and  to  place  the 
interest  of  the  concessions  and  settlements  above  the 
paramount  well-being  of  the  territorial  sovereign. 

Thus,  in  view  of  the  unsurrendered  sovereignty,  and, 
to  some  extent,  jurisdiction  of  China  over  the  conces- 
sions and  settlements,  the  observation  can  be  ventured 
that  the  self-governing  or  independent  municipalities 
located  therein  possess  no  more  power  than  the  mere 
delegation  of  purely  local,  corporate,  and  municipal  pow- 
ers and  functions.  They  are  to  attend  to  police,  sani- 
tation, roads,  and  other  local  and  administrative  func- 
tions of  a  municipal  government.    But  they  are  not  politi- 


CONCESSIONS  AND  SETTLEMENTS      317 

cal  bodies,  nor  do  they  act  as  agents  of  the  territorial 
sovereign,  except  when  the  territorial  sovereign  wishes 
to  make  them  so.  In  short,  their  powers  are  delegated, 
and  hence  limited,  and  subject  to  strict  construction ;  and 
are  for  local,  corporate  and  municipal  purposes,  and  not 
for  political  and  governmental  purposes.  Supporting  this 
view,  the  following  instructions  given  by  the  foreign  rep- 
resentatives at  Peking,  on  Augut  6,  1863,  to  the  rate 
payers  of  the  Shanghai  settlements  clearly  show  the 
powers  as  well  as  the  limitations  of  the  municipal  gov- 
ernment.-1 

"1.  That  whatever  territorial  authority  is  established 
shall  be  derived  directly  from  the  Chinese  Gov- 
ernment, through  the  rate  payers'  ministers. 

"2.  That  such  shall  not  extend  beyond  simple  munici- 
pal matters,  roads,  police,  and  taxes  for  municipal 
objects. 

"3.  That  the  Chinese  not  actually  in  foreign  employ, 
shall  be  wholly  under  the  control  of  Chinese  offi- 
cers, as  much  as  in  the  Chinese  city. 

"4.  That  each  consul  shall  have  the  government  and 
control  of  his  own  people,  as  now;  the  municipal 
authority  simply  arresting  offenders  against  the 
public  peace,  handing  them  over,  and  prosecuting 
them  before  their  respective  authorities,  Chinese, 
and  others,  as  the  case  may  be. 

"5.  Their  shall  In-  a  Chinese  element  in  the  municipal 
system,  to  whom  reference  shall  be  made,  and  as- 
sent obtained  to  any  measure  affecting  the  Chinese 
residents." 

Recent  developments  in  regard  to  the  concessions  and 
settlements  also  deserve  our  attention.  Upon  tin-  sever- 
ance of  diplomatic  relation  with  Germany  on  March  14, 
1917,  tlic  Chinese  Government  availed  itself  of  the  oppor- 
tunity and  tool:  over  the  German  concessions  in  Tientsin 
and  Hankow.  Two  wee!:-,  later,  on  March  28,  1917,  the 
Ministry  of  the  Interior  coininunicated  to  the  Ministry  of 


318        IMPAIRMENTS  OF  SOVEREIGNTY 

Foreign  Affairs  the  rules  of  procedure  governing  the  as- 
sumption of  control  of  the  German  concessions.22  The 
concessions  were  recognized  as  special  areas,  and  Bureaux 
for  the  Provisional  Administration  of  the  Special  Areas 
were  created.  A  Chief  of  Bureau  was  appointed  for 
each  of  the  special  areas  on  the  recommendation  of  the 
Ministry  of  Interior,  "to  control  police  and  other  admin- 
istrative affairs  therein  and  also  to  carry  out  police  and 
other  administrative  measures"  (Art.  1).  The  original 
municipal  council  of  the  area  was,  under  the  direction 
of  Chief  of  the  Bureau,  to  deal  with  all  matters  pertain- 
ing to  self-government,  but  "resolutions  passed  at  a  rate 
payers'  meeting  of  the  municipality  shall  not  be  enforced 
without  the  approval  of  the  chief  of  the  Bureau"  (Art.  2). 

Simultaneously  with  the  declaration  of  war  on  Ger- 
many and  Austria-Hungary  on  August  14,  1917.  the 
Government  Gazette  (August  14,  1917)  promulgated  the 
regulations  governing  the  Bureaux  for  the  municipal 
administration  of  the  German  concessions  at  Tientsin  and 
Hankow  and  the  Austrian  concessions  at  Tientsin.23  The 
Provisional  Bureaux  were  changed  to  Bureaux  for  the 
municipal  administration  of  the  special  areas.  Each 
bureau  is  to  have  a  chief,  who,  under  the  supervision 
of  the  Governor  of  the  province,  attends  to  the  police 
and  administrative  functions  of  the  municipality.  The 
matters  relating  to  foreign  relations,  however,  are  to  be 
dealt  with  in  conjunction  with  the  special  commissioner 
of  foreign  affairs  for  the  province  (Art.  1).  "Regula- 
tions promulgated  by  the  chief  of  the  Bureau  must  be 
submitted  by  the  Governor  to  the  Ministry  of  the  Inte- 
rior for  approval"  (Art.  4).  Thus,  it  is  to  be  observed 
that  the  recovered  concessions  are  placed  under  the  rule 
of  the  Municipal  Bureaux  for  the  Special  Areas,  which 
in  turn  are  under  the  direction  of  the  Ministry  of  the 
Interior. 

Further,  as  China  terminated  all  relations  with  the 
old  Czar  regime  of  Russia  by  the  Presidential  mandate 


CONCESSIONS  AND  SETTLEMENTS      319 

of  September  23,  1920,2*  and  as  she  did  not  extend  her 
recognition  to  soviet  Russia,  she  likewise  availed  herself 
of  the  opportunity  and  took  over  the  Russian  concessions. 
The  Chinese  commissioner  for  foreign  affairs  takes  the 
place  of  the  Russian  consul  in  the  municipal  government, 
but  the  municipal  council  is  to  remain  as  before.  That 
is,  the  municipal  government  of  the  Russian  concessions 
remains  as  of  old,  with  the  exception  that  the  Chinese 
commissioner  for  foreign  affairs  steps  into  the  shoes  of 
the  Russian  consuls.  "The  existing  administrations," 
stated  the  Waichiaopu,  "will  be  maintained  with  the  mu- 
nicipal councils  functioning  as  heretofore.  It  is  not  the 
intention  of  the  Chinese  Government  to  alter  the  status 
of  the  concessions,  Chinese  control  amounting  only  to 
the  commissioner  of  foreign  affairs  taking  the  place  of 
the  Russian  consul  (as  Chairman  of  the  Municipal  Coun- 
cil), that  is  to  say.  the  powers  and  privileges  formerly 
exercised  by  the  Russian  consul  will  be  transferred  to 
the  Commission  of  Foreign  A  Hairs.  .  .  .  The  main  ques- 
tion, that  of  the  continued  functioning  of  the  Municipal 
Councils,  has  never  been  in  doubt."  25  It  is  thus  seen  that 
the  policy  is  to  take  over  the  control  of  the  Russian  con- 
cessions, only  as  a  trustee,  pending  the  establishment  of 
a  stable  government  in  Russia  which  will  be  recognized 
by  China  and  the  other  Powers.  "The  Government  con- 
tinues to  emphasize  that  there  will  be  as  little  interfer- 
ence as  possible  with  the  present  administrations  of  those 
concessions,  and  that  it  is  merely  .acting  as  a  trustee  on 
behalf  of  a  future  Russian  Government  recognized  by 
China  and  the  other  Powers  with  which  China  was  re- 
cently associated  in  war.' 

We  cannol  conclude  this  discussion  without  pointing 
out  the  advantages  and  disadvantages  of  the  concessions 
and  settlements  with  a  view  to  their  eventual  restoration 
to  China.  It  musl  he  observed  that  they  have  been  in 
some  ways  beneficial  tu  the  Chinese  people.    First,  the}- 


320       IMPAIRMENTS  OF  SOVEREIGNTY 

have  supplied  an  example  to  the  Chinese  as  to  how  to 
administer  a  municipal  government  which  will  promote 
the  welfare  and  happiness  of  the  inhabitants.  Situated 
as  they  are  at  the  door  of  the  Chinese  nation,  they  are, 
in  many  cases,  real  object  lessons  to  the  Chinese  people 
in  municipal  administration.  Second,  they  have  been  not 
infrequently  the  zones  of  safety  for  the  common  people 
suffering  from  internal  disorders.  For  example,  during 
the  Taiping  Rebellion,  thousands  of  Chinese  flocked  to 
the  Shanghai  settlements  for  safety.  Again,  in  the  recent 
disorders  during  and  following  the  Revolution  of  1911, 
they  have  often  served  as  fortresses  of  Chinese  life, 
liberty  and  property. 

Despite  these  advantages,  their  existence  results  in 
serious  disadvantage  to  the  Chinese  Government,  and, 
in  some  ways,  to  the  Chinese  people.  First,  while  the 
Chinese  constitute  the  bulk  of  the  inhabitants  and  con- 
tribute by  far  the  largest  share  of  the  revenue  of  these 
municipalities,  they  are  yet  denied  the  right  of  representa- 
tion in  the  municipal  council.  This  is  generally  so,  with 
the  sole  exception  of  the  Kulangsoo  International  Settle- 
ment, where  the  municipal  council  has  a  Chinese  delegate 
appointed  by  the  local  Chinese  authority.  In  the  SI 
hai  International  Settlement,  the  Chinese  composing 
ninety-five  per  cent  of  the  residents,  have  no  r  | 
tion  whatever  in  the  municipal  council,  but  are  only 
granted  the  privilege  of  having  an  advisory  committee 
elected  annually  by  the  Chinese  commercial  bodies.'  It 
is  not  unreasonable  to  state  that  the  existing  situation  is 
tantamount  to  taxation  without  representation. 

Second,  while  China  has  never  surrendered  her  sov- 
ereignty, and  has  only  granted  or  delegated  the  powers  of 
municipal  government  for  local  and  corporate  purposes, 
and  not  for  political  and  governmental,  her  sovereignty 
IS  much  impaired  and  infringed,  u  d  her  administration  is 
much  obstructed  by  the  practices  and  claims  of  the  con- 
cessions and  settlements.     The  Chinese  residing  therein 


CONCESSIONS  AND  SETTLEMENTS      321 

cannot  be  arrested  except  with  the  consent  of  the  consul, 
or  in  the  case  of  the  Shanghai  International  Settlement, 
of  the  senior  consul ;  and  in  the  case  of  Chinese  connected 
with  foreign  firms,  consent  must  be  obtained  of  the  con- 
sul of  the  Power  to  whose  nationality  the  firm  belongs. 
Chinese  fugitives  from  justice  cannot  be  arrested  save 
with  the  concurrence  of  the  authorities  of  the  concessions 
or  settlements.  Chinese  residents,  even  when  no  foreign 
interests  are  involved,  must  be  tried  in  the  mixed  court. 
In  the  case  of  the  Shanghai  International  Settlement, 
the  foreign  assessor  not  only  attends  the  proceedings, 
but  virtually  acts  as  judge,  trying  and  deciding  the  case. 
Though  parts  of  Chinese  territory,  Chinese  troops  are 
not  permitted  to  pass  through  these  concessions  or  settle- 
ments. "This  assertion  of  exclusive  authority  and  the 
power  has  made  each  concession  virtually  *un  petit  etat 
dans  l'etat'  to  the  impairment  of  China's  rights  as  terri- 
torial sovereign."  28 

In  view  of  these  serious  disadvantages,  the  Chinese 
Government,  through  its  delegation  at  the  Paris  Peace 
Conference,  declared  its  desire  for  the  restoration  of  the 
foreign  concessions  and  settlements.20  It  proposed  that 
the  powers  should  enter  into  negotiations  with  China  for 
the  return  of  these  areas,  and,  to  obviate  the  objections 
of  vested  interests,  it  further  suggested  that  the  re 
tion  should  take  place  "at  the  end  of  five  years  from 
the  date  of  such  arrangement." 

'lie    consummation    of    the    measure,    however, 

the  Chinese  Government  proposed  four  immediate  changes 
in  order  to  remove  certain  unsatisfactory  features  in  con- 
nection with  the  foreign  concessions  and  settlement 

follows : 

"1.  The  Chinese  citizens  shall  have  the  righl  to  own 

land    in    .all    tl  tlS    and    settlements    under    the 

same  conditions  as  for« 


322        IMPAIRMENTS  OF  SOVEREIGNTY 

2.  That  Chinese  citizens  residing  in  the  concessions 
shall  have  the  right  to  vote  in  the  election  of  members 
of  the  municipal  councils  and  to  be  elected  thereto ; 

3.  That  warrants  issued  and  judgments  delivered  by 
competent  Chinese  courts  outside  the  concessions  shall 
be  executed  in  the  concessions,  without  being  subject  to 
any  revision  whatsoever  by  the  foreign  authority 

4.  That  in  no  foreign  concessions  shall  a  foreign  as- 
sessor be  allowed  to  take  part  in  the  trial  or  decision  of 
cases  wherein  Chinese  citizens  alone  are  concerned."  no 

It  is  manifest  that  the  Chinese  Government  is  deter- 
mined to  recover  these  concessions  and  settlements.  To 
this  end,  on  the  one  hand,  it  has  recovered  the  German 
and  Austrian  concessions,  and  has  also  temporarily  taken 
over  the  control  of  the  Russian  concessions  pending  the 
coming  negotiations  with  the  recognized  government  of 
Russia.  On  the  other  hand,  it  has  expressed  its  earnest 
desire  to  recover  the  other  foreign  concessions  and  settle- 
ments as  manifested  in  the  claims  made  public  at  the 
Paris  Peace  Conference,  ft  is  hoped  that  the  rapid 
progress  of  the  Chinese  Government  in  municipal  ad- 
ministration will  soon  secure  the  restoration  and  recovery 
of  the  foreign  concessions  and  settlements,  so  that  this 
phase  of  the  impairment  of  China's  sovereignty  may  be 
remedied. 


NOTES  TO  CHAPTER  XIX 

1.  State  Papers,  Vol.  31,  p.  132  <t  seq. 

2.  Land  Regulations,  1845.  North  China  Herald,  Jan.  17,  1852, 
quoted  in  E.  S.  Tai,  Treaty  Ports  in  China,  p.   12. 

2A.    State  Papers,  Vol.  90,  p.  974;  also  see  Art.  28,  p.  986. 

3.  Hertslet's  China  Treaties,  VoL   1,  No.  65,  pp.  382-383. 

4.  Tyau,  Treaty  Obligations  Between  China  and  Other  States, 
p  59. 

5.  Morse,  The  Trade  and  Administration  of  China,  p.  221. 

6.  7,  8.    Ibid.,  p.  217. 

9.  Ibid,  p.  216. 

10.  Ibid.,  p.  216. 


CONCESSIONS  AND  SETTLEMENTS      323 

11.  State  Papers,  Vol.  90,  1898,  p.  970  et  seq.;  Hertslet,  op. 
cit.,  Vol.  2,  No.  130,  p.  604  et  seq. 

12.  How  Shanghai  Is  Governed,  address  by  Mr.  E.  C.  Pearce, 
former  Chairman  of  the  Shanghai  Municipal  Council,  before 
Shanghai  League  at  the  Royal  Asiatic  Societv  Hall  on  October 
26.  VJ20,  published  in  .Millard's  Review.  Oct.  30,  1920,  pp.  444-440. 

13.  W.  W.  Willoughby,  Foreign  Rights  and  Interests  in  China, 
p.  209;  Land  Regulations  of  the  British  Concession  at  Hankow, 
May,  1902,  Hertslet,  Vol.  2,  No.  149,  p.  789  et  seq. 

14.  \Y.  W.  Willoughby,  op.  cit.,  p.  210. 

15.  Ibid,  p.  210;  Land  Regulations,  1869,  Hertslet,  Vol.  2,  No. 
130,  p.  004  et  seq..  Articles  2.  3,  4,  5. 

16.  W.  \V.  Willoughby,  op.  cit,  p.  209. 

17.  Additional  articles  to  the  Treaty  of  Commerce  Between 
the  United  ina,  June  18,  1885,  signed  at  Washing- 
ton, July  2X,  1868,  Hertslet,  Vol.  1.  No.  96,  p.  554  et  seq.,  Art.  1. 

18.  Hertslet,  Vol.  1,  No.  96,  pp.  554-555,  Article  1. 

19.  U.  S.  Foreign  Relations,  1886,  p.  95,  Air.  Bayard  to  Mr. 
Denby.  July  2Z,  1886. 

20.  China,  1864,  No.  3,  pp.  10-11,  Enclosure  5  in  No.  4,  Mr. 
Bruce  to  Consul  Medhurst,  Nov.  5,  1862;  No.  61,  Earl  Russel 
to  Sir  F.  Bruce,  April  8,  1863;  Tyau,  op.  cit.,  pp.  61-62. 

21.  The  Shantung  Question  submitted  by  the  Chinese  Peace 
Delegation  to  the  Paris  Peace  Conference,  1919,  published  by  the 
Chinese  National  Welfare  Society,  1920,  p.  84;  China,  1864,  No. 
3,  p.  146;  Tyau,  op.  cit.,  p.  60. 

22.  MacMurrav,  1917/7. 

23.  MacMurrav,  1917/7. 

24.  Millard's  Review,  Oct.  9,  1920,  pp.  281-282. 

25.  H.  K.  Tong,  article  on  The  New  Development  of  the 
Sino-Russian  Situation,  Millard's  Review,  Oct.  9,  1920,  pp.  281, 
283. 

Ibid. 

27.  The  Shantung  Question,  op.  cit.,  p.  83. 

28.  Ibid.,  p.  84. 

29.  Ibid.,  pp.  83-86. 

30.  I  Lid.,  p.  86. 


XX 

LEASED  TERRITORIES 

Moke  detrimental  to  the  sovereignty  of  China  than  con- 
cessions and  settlements  are  leased  territories.  They  are 
usually  naval  bases  forcibly  arrested  from  China  by  the 
great  Powers  in  the  general  scramble  for  concessions  and 
leases  in  1898.  They  have  virtually  become  independent 
principalities  located  at  the  strategic  points  of  China's 
coast. 

By  leased  territories  are  meant  the  areas  leased  to  the 
foreign  Powers  for  a  fixed  term  of  years,  during  which 
period  the  Chinese  Government  withholds  the  exercise  of 
her  jurisdiction  over  these  areas,  and  instead  the  juris- 
diction of  the  lessee  state  is  substituted.  They  are  like 
concessions  and  settlements  in  that  they  are  still  Chinese 
territories  and  that  they  derive  their  just  powers  from 
the  grant  of  the  territorial  sovereign,  but  they  are  unlike 
concessions  and  settlements  in  that  they  exercise,  not 
only  the  proprietary  and  municipal  powers,  but  also  politi- 
cal and  governmental  jurisdiction. 

It  is  needless  to  narrate  in  detail  the  origin  of  the 
leased  territories.  Suffice  it  to  reiterate  that  they  are 
the  direct  consequences  of  the  general  scramble  for 
leases  and  concessions  in  1898.  It  will  be  remembered 
that  Germany,  using  the  murder  of  two  German 
Catholic  priests  in  Shantung  as  a  pretext,  seized  Kiao- 
chow  and  acquired  its  lease  for  ninety-nine  years  by  the 
convention  of  March  6,  1898.1 

On  the  very  same  day  on  which  the  German  lease  was 
concluded,  Russia  demanded  the  lease  of  Port  Arthur 
and  Talienwan  and  obtained  the  same  by  the  Treaty  of 

324 


LEASED  TERRITORIES  325 

March  27,  1898,2  for  a  period  of  ninety-nine  years.  Im- 
pelled by  the  necessity  of  preserving  the  balance  of 
power,  Great  Britain  secured  the  lease  of  Kowloon,  op- 
posite Hongkong,3  on  June  9,  1898,  including  Deep  Bay 
and  Mirs  Bay  for  a  term  of  ninty-nine  years,  and  the 
lease  of  Weihaiwei,  on  July  1,  1898,  "for  so  long  a 
period  as  Port  Arthur  shall  remain  in  the  occupation  of 
Russia."  4 

Subsequent  changes  in  the  control  of  the  leased  terri- 
tories also  deserve  our  notice.  As  we  all  know,  by  the 
Russo-Japanese  War,  Japan  succeeded  to  Russia  in  the 
lease  of  Port  Arthur  and  Talienwan  by  the  treaty  of 
Portsmouth  (September  5,  1905 ),5  and  later  obtained 
China's  consent  to  the  transfer  by  the  Agreement  of  De- 
cember 22,  1905. r,A  To  reiterate  what  has  been  said,  as  the 
original  Russia  lease  was  only  for  twenty-five  years,  she 
obtained  its  extension  to  ninety-nine  years  by  the  Treaty 
of  May  25,  1915,  relating  to  South  Manchuria  and  East- 
ern Inner  Mongolia.0  Again,  during  the  World  War, 
she  succeeded  to  Germany  in  Kiaochow  and  Shantung.7  B 

The  concession  of  leased  territories  generally  consist 
of  a  strategic  base,  a  neutral  zone,  and  jurisdiction  over 
rritories  in  question.  The  first  earmark  of  a  leased 
territory  i  ic  base,  which  is  often  vested  with 

the  right  of  fortification.  In  the  Kiaochow  lease  conven- 
tion, this  provision  was  found  |  Aj  tide  2).° 

".  .  .  His   Majesty  the  Emperor  of   China  c<  les   to 
any  on  lease,  provisionally  for  99  years,  both 
of  the  entrance  to  the  Bay  of  Kiaochow.    Germany  en- 
truct,  at  a   suitable   moment,   on   the   teni- 
fortifications  for  the  protection  of  the 
buildings  to  b  meted  then-  and  of  the  entrant 

the  harbor." 

Tn  the  lease  of   Port  Arthur  and  Talienwan,  it   is  stipu- 

1: 


326        [MPAIRMENTS  OF  SOVEREIGNTY 

"The  governments  of  the  two  countries  agree  that,  as 

Port  Arthur  is  solely  a  naval  port,  only  Russia  and 
Chinese  vessels  are  to  be  allowed  to  use  it,  and  it  is  to 
be  considered  a  closed  port  as  far  as  the  war  and  mer- 
chant vessels  of  the  other  Powers  are  concerned"  (Ar- 
ticle 6).0A 

Again,  in  the  French  lease  of  Kwangchowwan,  it  is  de- 
clared : 

"Le  Gouvernement  Chinois,  en  raison  de  son  Amitie 
pour  la  France,  a  donne  a  bail  pour  99  ans  Kouang-Tche- 
ououan  au  Gouvernement  franqais  pour,  y  etabir  une 
station  navale  avec  depot  de  charbon, —  (Article  1).  La 
France  pourra  elever  des  fortifications,  faire  tenir  gar- 
rison a  des  troupes  ou  prendre  toute  autre  mesure  de- 
fensive dans  le  terrain  loue"  (Article  4).10 

Similarly,  in  the  lease  of  Kowloon  the  preamble  reads : 

"whereas  it  has  for  many  years  past  been  recognized  that 
an  extension  of  Hongkong  territory  is  necessary  for 
proper  defense  and  protection  of  the  Colony."  X1 

It  is  further  provided  that  the  area  so  leased  should  in- 
clude the  waters  of  Mirs  Bay  and  Deep  Bay,  probably 
strategically  necessary  for  the  safety  of  Hongkong. 
Finally,  in  the  lease  of  Weihaiwei  it  is  stated : 

"His  Majesty  the  Emperor  of  China  agreed  to  lease 
to  the  Government  of  Her  Majesty  the  Queen  of  Great 
Britain  and  Ireland,  Weihaiwei,  in  the  Province  of  Shan- 
tung, and  the  adjacent  waters.  .  .  .  Great  Britain  shall 
have  in  addition  the  right  to  erect  fortifications,  station 
troops,  or  take  any  other  measures  necessary  for  defen- 
sive purposes.  .  .  ." 12 

Thus,  the  leased  territories  are  obtained  primarily  as 
strategic  bases  with  the  right  of  fortification. 

The  second  earmark   of    the   Leased    territories   is   the 


LEASED  TERRITORIES  327 

neutral  zone.  It  is  established  largely  for  the  protection 
of  the  strategic  base.  In  Kiaochow  a  neutral  zone  of  fifty 
kilometers  surrounding  the  Bay  at  high  water  was  demar- 
cated, within  which  China  engaged  to  permit  the  free 
passage  of  German  troops  and  "to  place  no  obstacle  in 
the  way  of  any  regulation  of  the  water  courses  which  may 
prove  to  be  necessary."  She  also  engaged  not  to  issue 
any  ordinances  or  take  any  other  measures  or  station 
troops  without  previous  consent  of  the  German  Govern- 
ment (  Article  1  i.1  In  the  Russian  lease  of  Port  Arthur 
and  Talienwan,  a  neutral  zone  was  likewise  provided 
(Art.  5): 

"To  the  north  of  the  territory  leased  there  shall  be 
left  a  piece  of  territory,  the  extent  of  which  is  to  be 
arranged  by  Hsu  Ta-Jen  and  the  Russian  Foreign  Office. 
This  piece  is  to  be  entirely  left  to  the  Chinese  officials, 
but  no  Chinese  troops  are  to  enter  it  except  after  ar- 
rangement with  the  Russian  officials."  '  A 

In  the  French  lease  of  Kwangchowwan,  while  there 
was  no  specific  mention  or  provision  of  a  neutral  zone, 
the  demarcation  of  the  leased  territory  was  so  made  as 
t<»  include  a  large  area  surrounding  the  Bay  of  Kwang- 
chowwan, which,  for  all  practical  purposes,  took  the 
place  of  a  neutral  zone.11  Similarly,  in  the  lease  of  Kow- 
loon,  although  there  no  neutral  zone  was  provided,  the 
extension,  or  rather  the  lease  itself,  extended  so   far  into 

the  interior  as  to  create  a  small  buffer  area  which  served 
the  purpose  of  affording  protection  to  Hongkong,  just  :is 
the  neutral  zone  would  to  Kiaochow  or  Porl  Arthur  and 

Talienwan.  Again,  in  the  lease  of  W'eiliaiwci,  instead  of 
a   neutral    zone,   a   belt    of    land    ten    English    miles    wide 

along  the  entire  coast  line  of  the  Bay  of  Waihaiwai  and 
under  the  sole  jurisdiction  of  <  neat  Britain  was  com 
which  was  tantamount  to  the  neutral  /cine,  if  not  better. 

In  short,  the  leased  territories,  whose  primary  purpose  is 

the  intrenchment  of  the  Powers  concerned  in  their  re- 


32S       IMPAIRMENTS  OF  SOVEREIGNTY 

ivc  Strategic  naval  and  military  bases,  are  surrounded 
either  by  a  neutral  zone,  or  by  a  belt  of  land  under  tbe  sole 
jurisdiction  of  tbe  foreign  Power  in  question  of  suffi- 
cient width  and  length  for  the  protection  of  the  strategic 
bases. 

The  third  earmark  of  the  leased  territories  is  tbe  exclu- 
sive jurisdiction  of  the  foreign  Powers  concerned 
tbe  leased  areas.  During  the  term  of  the  lease,  China 
engages  to  suspend  the  exercise  of  her  jurisdiction,  and 
exclusive  jurisdiction  of  tbe  foreign  Powers  is  substi- 
tuted.   The  Kiaocbow  lease  convention  bad  this  provision: 

"In  order  to  avoid  the  possibility  of  conflicts,  the  Im- 
perial Chinese  Government  will  abstain  from  exercising 
rights  of  sovereignty  in  tbe  ceded  territory  during  tbe 
term  of  the  lease,  and  leave  the  exercise  of  the  same  to 
Germany  .  .  ."  (Art.  3). 

The   Russian  lease  of  Port  Arthur  and  Talieuwan  pro- 
vided  (Art.  4)  : 

"Within  the  term  fixed,  in  the  territory  leased  to  Rus- 
sia, and  in  the  adjacent  waters,  all  movements  of  forces, 
whether  naval  or  military,  and  tbe  appointment  of  high 
officials  to  govern  the  districts,  shall  be  entirely  left  to 
Russian  officers.  .  .  ." 

The  French  lease  of   Kwangchowwan  states: 

"Le  territoire  sera  gouverne  et  administre  pendant  les 
99  ans  de  bail  par  la  France  seule,  cela  afin  d'eviter  tout 
frois>cment  possible  entre  les  deux  pays"  (Art.  3). 

The  lease  of  Kowloon  stipulates  that 

"Within  the  city  of  Kowloon  the  Chinese  officials  now 

stationed   there   shall   continue   to   exercise   jurisdiction 

I   mi   far  as  may  be  inconsistent  with  the  military 

requirement   for  the  defense  of  Hongkong.     Within  the 


LEASED  TERRITORIES  329 

remainder  of  the  newly  leased  territory  Great  Britain 
shall  have  sole  jurisdiction."  (On  account  of  the  re- 
sistance of  the  natives  of  Kowloon  to  the  entrance  into, 
and  assumption  of  the  control  of,  the  city  of  Kowloon, 
Chinese  jurisdiction  was  discontinued  on  May  16,  1899  I.18 

Finally  the  lease  of  Waihaiwai  contains  practically  the 
same  stipulation,  respecting  jurisdiction  and  administra- 
tion. 

In  consequence  of  this  grant  of  exclusive  jurisdiction 
during  the  term  of  the  lease,  Chinese  troops  are  not 
permitted  to  pass  except  with  the  consent  of  the  lessee 
state.  For  instance,  in  the  Russian  lease  of  Port  Arthur 
and  Talienwan  the  stipulation  was  found   (Art.  9)  : 

"No  Chinese  troops  of  any  kind  whatever  are  to  be 
allowed  to  be  stationed  within  this  boundary." 

Fugitives  from  justice  have  to  be  extradited  as  if  from 
a  foreign  jurisdiction  (Art.  6).16  The  Chinese  customs 
are  relinquished  and  removed  to  the  frontiers  of  the 
leased  territories. 

"As  regards  the  reestablishment  of  Chinese  customs 
stations  which  formerly  existed  outside  the  ceded  terri- 
tory but  within  the  50  kilometer  zone,  the  Imperial  Ger- 
man Government  intends  to  come  to  an  agreement  with 
the  Chinese  Government  for  the  definite  regulation  of 
the  customs  frontier,  and  the  mode  of  collecting  duties"  " 
(  Article  5). 

Chinese  residents  are  placed  under  the  protection  of 
the  foreign  governments  concerned  and  must  observe  the 
established  law  and  order.1  H 

In   faet,  so  complete  is   this  grant  of   jurisdiction   that 

even    the    Foreign    nationals    enjoying    extraterritorial 

rights,  upon  entrance  into  tin-  leased  territories,  lose  their 
extraterritorial  privileges  and  must  submit  themselves  t.> 
the  jurisdiction  of  the  lessee  state. ,u    This  position  wza 


330       IMPAIRMENTS  OF  SOVEREIGNTY 

accepted  by  all  the  Powers,  except  Japan,  who,  however, 
after  supplanting  Russia  in  Port  Arthur  and  Talienwan, 

also  changed  her  position.     Supporting  this  view,  John 
Hay  said  :  '-'" 

".  .  .  The  intention  and  effect  of  China's  for 
leases  having  apparently  heen  the  relinquishment  by  China 
during  the  term  of  the  leases  and  the  conferment  upon 
the  foreign  power  of  all  jurisdiction  over  the  territory, 
such  relinquishment  and  transfer  of  jurisdiction  was  seen 
to  involve  the  loss  by  the  United  States  of  its  right  to 
exercise  extraterritorial  consular  jurisdiction  in  the  terri- 
tories so  leased,  while,  as  you  remark,  as  these  territories 
have  practically  passed  into  the  control  of  peoples  whose 
jurisdiction  and  method  are  akin  to  our  own,  there  would 
seem  to  be  no  substantial  reason  for  claiming  the  con- 
tinuance of  such  jurisdiction  during  the  foreign  occu- 
pancy or  tenure  of  the  leased  territory." 

On  the  other  hand,  notwithstanding  the  grant  of  ex- 
clusive jurisdiction,  China's  sovereignty  over  the  leased 
territories  during  the  term  of  the  lease  is  in  no  way  sur- 
rendered or  waived.  In  fact,  this  was  clearly  stipulated 
in  some  leases  and  in  the  others  partially  recognized. 

"His  Majesty  the  Emperor  of  China,  .  .  .  engages, 
while  reserving  to  himself  all  rights  of  sovereignty  in  a 
zone  of  50  kilometers  (100  Chinese  li)  surrounding  the 
Bay  of  Kiaowchow  at  high  water,  to  permit  the  free 
passage  of  German  troops  within  this  zone  at  any 
time,  .  .  ."21 

"This  act  of  lease,  however,  in  no  way  violates  the 
sovereign  rights  of  His  Majesty  the  Emperor  of  China  to 
the  above-mentioned  territory. 

In  the  convention  for  the  lease  of  ECowloon  and  YYai- 
haiwai,  however,  there  is  no  mention  of  the  reservation 
of  China's  sovereignty,  but  the  civil  jurisdiction  within 


LEASED  TERRITORIES  331 

the  city  of  Kowloon  and  Waihaiwai  was  reserved  to 
the  Chinese  authorities,  "except  so  far  as  may  be  in- 
consistent with  the  naval  and  military  requirements  for 
the  defense  of  the  territory  leased 

Again,  the  sovereignty  of  China  is  affirmed  by  the 
reservations  regarding  China's  special  right  of  naviga- 
tion in  the  leased  waters.  With  the  exception  of  Kiao- 
chow,  where  the  Chinese  ships  were  treated  like  those 
of  other  nations,  the  other  leased  waters  gave  them  spe- 
cial privileges.  Port  Arthur,  being  a  closed  port,  ad- 
mitted only  Russian  and  Chinese  vessels. 

In  the  waters  of  Mirs  Bay  and  Deep  Bay, 

"It  is  agreed  that  Chinese  vessels  of  war,  whether  neu- 
tral or  otherwise,  shall  retain  the  right  to  use  these 
waters." 

The  same  right  is  reserved  in  the  lease  of  Waihaiwai.  In 
the  Bay  of  Kwangchowwan,  however,  the  Chinese  ves- 
sels enjoy  the  privilege  only  on  condition  of  neutrality : 

"Le  mouillage  en  eau  profonde  le  plus  voisin  de  ce 
point  d'abontissement  (eaux  territoriales)  sere  exclusive- 
ment  reserve  aux  navires  de  querre  francais  et  chinois, 
ces  derniers  en  situation  de  neutralite  seulement"  (Art. 
8). 

Further,  the  sovereignty  of  China  is  recognized  by  the 
fact  that  the  lease,  without  the  consent  of  China,  is  un- 
transferable. The  lessee  state  possesses  no  righl  to  let, 
or  sublet,  or  transfer,  or  alienate  the  lease  in  any  form 
to  any  other  foreign  Power  without  the  express  con- 
sent of  the  territorial  sovereign  who  grants  it.  In  the 
Kiaochow  lease,  it  was  specifically  stipulated: 

"Germany  engages  at  no  time  to  sublet  the  territory 
leased  from  China  to  another  Power."    ' 


332       IMPAIRMENTS  OF  SOVEREIGNTY 

In  the  other  leasts,  there  is  no  such  express  prohibi- 
tion, but  the  precedent  set  l>y  the  transfer  of  Port  Arthur 
and  Talienwan  to  Japan  in  1905,  with  the  consent  of 
China,  indicates  conclusively  that,  in  the  absence  of  ex- 
stipulation,  the  consent  of  the  territorial  sovereign 
is  essential  to  the  validity  of  the  transfer.  Thus,  in  the 
treaty  of  Portsmouth,  it  was  provided: 

"The  Imperial  Government  of  Russia  cede  to  the  Im- 
perial Government  of  Japan,  with  the  consent  of  the  Gov- 
ernment of  China,  the  lease  of  Port  Arthur,  of  Talien- 
wan, and  the  territories  and  adjacent  territorial  waters, 

"The  two  high  contracting  parties  mutually  engage  to 
ohtain  from  the  Government  of  China  the  consent  men- 
tioned in  the  above  stipulation."  -5 

In  pursuance  of  this  stipulation,  on  December  22,  1905, 
Japan   obtained    the   consent  of    China : 

"The  Imperial  Chinese  Government  consent  to  all  the 
transfers  and  assignments  made  by  Russia  to  Japan  by 
Articles  5  and  6  of  the  Treaty  of  Peace  above  mentioned" 
(Art.  l).-° 

/ 
And  the  fact  that  the  grant  is  personal  to  the  grantee 
and  made  in  derogation  of  China's  sovereignty  further 
renders  the  transference,  without  the  consent  of  China, 
unthinkable  and  unjustifiable. 

.  the  sovereignty  of  China  can  also  be  pr 
by  virtue  of  the  implied  conditions  or  covenants  which 
must  be  included  in  the  leases.  The  lessee  states  are  to 
enjoy  their  privileges  of  tenancy  only  on  good  behavior 
and  quiet  enjoyment  ;  and  should  the  lessee  states  prove 
themselves  to  be  nuisances  or  menaces  to  the  welfare 
and  safety  of  the  territorial  sovereign  or  other  mi^hbor- 

tates,  the  territorial  sovereign  who  granted  the 
would  have  the  right  to  abate  the  nuisance  or  to  eliminate 


LEASED  TERRITORIES  333 

the  menace.  Further,  the  lessee  states  must  restore,  at 
the  expiration  of  the  leases,  the  leased  territories  "in  as 
good  a  condition,  allowing  for  reasonable  wear  and  tear, 
as  when  the  latter  first  conveyed  it  to  him;"  -7  and  should 
the  territories,  on  restoration,  prove  to  be  deteriorated  or 
impaired  in  any  way,  due  to  the  negligence  of  the  ! 
states  to  keep  them  in  repair,  the  territorial  sovereign 
would  he  entitled  to  due  compensation  or  indemnity. 

In  addition,  as  incident  to  her  sovereignty,  China  re- 
tains the  right  to  declare  the  neutrality  of  the  leased 
territory.  As  long  as  her  sovereignty  over  the  areas  in 
question  is  retained,  so  long  is  she  entitled  to  place  them 
under  the  protection  of  her  neutrality.  On  the  other 
hand,  in  exercising  the  right  of  neutrality,  she  at  the 
same  time  assumes  the  responsibility  to  see  that  strict 
neutrality  is  observed  by  the  lessee  state  in  the  leased 
areas.  While  conceding  the  right  of  self-defense,  as 
otherwise  the  lessee  state  would  not  be  able  to  restore 
the  leased  territories,  she  nevertheless  requires  that,  in 
time  of  a  war  between  the  lessee  states  and  other  states, 
the  lessee  state  must  observe  neutrality  in  the  leased  areas 
and  retain  the  territories  only  on  condition  of  quiet  en- 
joyment. Should  the  lessee  Power  make  the  leased  area 
a  belligerent  base  of  action,  thus  menacing  the  rights  of 
other  belligerents  and  thereby  violating  the  neutrality  of 
rea,  the  territorial  sovereign  would  be  obliged  to  eii- 
Strict  neutrality  by  either  prohibiting  the  belligerent 
activities  of  the  lessee  state  or  by  abating  the  nuisances 
and  removing  the  sources  of  menace,  thus  fulfilling  her 
own  responsibility  arising  from  the  .status  of  neutrality. 
If,  however,  she  should  fail  to  do  so,  the  other  belliger- 
ent states  interested  could   lodge  protests  and   require 

the  territorial  sovereign  tO  restrain  or  remove  the  nuisance 
or  menace,  hut  if  the  menace  should  prove  to  In-  '"instant, 
Overwhelming,  leaving  no  choice  of   mean-,  ami   no  time 

for  deliberation,"  '-'s  then  the  belligerent  Tower-  concerned 

might   abate   the   nuisance   or   remove   the   menace    them- 


334        IMPAIRMENTS  OF  SOVEREIGNTY 

selves.    In  this  case  the  rights  of  the  territorial  sovereign 
remain    unimpaired,    and    the    eventual    disposal    of    the 

1  area  requires  the  sanction  of  the  territorial  e 
eign. 

We  now  come  to  the  disadvantages  of  the  leased  terri- 
tories with  a  view  to  their  restitution  to  China.  First, 
these  leased  territories,  located  as  they  are  at  stn 
points,  weaken  and  hamper  the  national  defense  of  China. 
By  their  continued  existence,  they  deprive  her  of  her  best 
military  and  naval  bsaes,  which  cannot  but  contribute 
materially  to  the  relative  military  weakness  of  the  nation. 
Besides,  in  a  war  between  the  lessee  state  and  China,  they 
will  be  used  inevitably  by  the  lessee  state  as  a  base  of 
action  against  her,  thus  threatening  the  very  safety  and 
integrity  of  the  territorial  sovereign.  Second,  being  stra- 
tegic points  with  fortifications,  they  are  likely  to  become 
the  objects  of  struggle  in  a  war,  wherein  the  lessee  state 
is  a  party.  Thus  war  is  brought  to  Chinese  territory, 
although  she  may  not  be  a  party  thereto.  In  the  Russo- 
Japanese  War,  the  great  battles  were  fought  around  Port 
Arthur,  although  China  was  technically  a  neutral.  Fur- 
ther, in  the  event  of  their  occupation  by  the  other  Powers 
in  consequence  of  war,  they  would  become  a  source  of 
complication  to  China.  As  an  outcome  of  the  Russian 
defeat  in  the  Russo-Japanese  War,  China  had  to  consent 
to  the  transfer  of  Port  Arthur  and  Talienwan  to  Japan. 
Recently,  as  a  result  of  the  capture  of  Kiaochow  by 
Japan,  China  was  again  involved  in  a  controversy  with 
Japan,  which  has  as  yet  not  been  settled. 

Hence,  for  the  sake  of  self-defense  and  self-preserva- 
tion, the  Chinese  Government,  through  her  delegation  at 
the  Paris  Peace  Conference,  made  known  its  earnest  de- 
sire for  the  restitution  of  these  leased  territories.  "As 
the  prolongation  of  the  foreign  control  over  the  leased 
territories  constitutes  a  continued  lordship,  whose  in- 
jurious effects  tend   from  day   to  day   to  increase,  the 


LEASED  TERRITORIES  335 

Chinese  Government  feel  in  duty  bound  to  ask  for  the 
restitution  of  these  territories,  with  the  assurance  that, 
in  making  this  proposal,  they  are  conscious  of,  and  are 
prepared  to  undertake,  such  obligations  as  the  relinquish- 
ment of  control  may  equitably  entail  on  them  as  regards 
the  protection  of  the  rights  of  property  owners  therein 
and  the  administration  of  the  territories  thus  restored  to 
the  complete  control  of  China."  M 


NOTES  TO  CHAPTER  XX 

1.  Hertslet's  China  Treaties,  Vol.  1,  No.  59,  pp.  350-354; 
vide  supra,  chapter  on  The  International  Struggle  for  Con- 
cessions 

2.  Hertslet,  Vol.  1,  No.  88,  pp.  505-508.  (3a)  Hertslet,  No.  55, 
pp.  329-331 ;  the  Shantung  Question,  presented  by  China  to  the 
Paris  Peace  Conf.,  pub.  by  the  Chinese  Nat.  Welfare  Society, 
1920,  p.  81. 

3.  Hertslet,  Vol.  1,  No.  24,  p.  120. 

4.  Hertslet,  Vol.  1,  No.  25,  p.  122. 

5.  State  Papers,  Vol.  98,  pp.  734-740;  MacMurray,  1905/8. 
5A.    Hertslet,  Vol.  1,  No.  67,  pp.  391-396. 

6.  MacMurray,  1915/8. 

7.  MacMurray,  1915/8;  The  Chino-Japanese  Negotiations, 
1915,  p.  49  et  seq. 

8.  The  Chino-Japanese  Negotiations,  1915,  p.  53. 

9.  Hertslet,  Vol.  1,  No.  59,  p.  351. 

9A.    Hertslet,  Vol.  1,  No.  88,  pp.  506-507. 

10.  Hertslet,  Vol.  1,  No.  55,  p.  329  et  seq. 

11.  Hertslet,  Vol.  1,  No.  24,  p.  120. 

12.  Hertslet,  Vol.  1,  No.  25,  p.  122. 

13.  By  the  Convention  of  Nov.  28,  1905,  Germany  withdrew  her 
troops  from  Kiaochow  and  Kaomi,  The  Shantung  Ouestion, 
Aim..,  No.  3  to  Vol.  2,  pp.  54-66. 

)s.\.  In  the  additional  agreement  between  China  and  Russia 
ling  the  boundaries  of  I '< >rt  Arthur  and  Talienwan,  May 
7,  1898,  the  boundary  of  the  leased  territory  was  denned  I  \rt.  1 ) 
and  the  neutral  zone  was  provided  as  follows:  (Art.  J)  "To  the 
north  of  tin-  boundary  fixed  in  Article  l,  there  shall,  in  accord- 
ance with  Article  5  of  the   Peking  Treaty,   be   a   neutral   ground, 

the  northern  boundary  of   which  shall  commence  on  the  west 

coasl  of  Liaotnng  at  the  mouth  of  the   Kaichow   River,  shall 

north  of  Yu  Sfen-Ch'ang  to  the  Ta-Yang  River,  and  shall 

follow  the  left  bank  of  that  river  to  its  mouth,  which  shall  he 
included  in  the  neutral  territory."— Hertslet,  Vol.  1,  No.  89,  np, 
508-509. 


336        IMPAIRMENTS  OF  SOVEREIGNTY 

14.  Hertslet,  Vol.  1,  No.  55,  p.  329,  Art.  2. 

15.  North  China  Herald,  Apr.  24,  May  22,  1899,  cf.  Morse, 
The  International  Relations  of  the  Chinese  Empire,  Vol.  3,  p.  120, 

16.  Hertslet,  Vol.  1,  No.  55,  p.  330. 

17.  Hertslet,  Vol.  1,  No.  59,  p.  353. 

IS.    Hertslet,  Vol.   1.  No.  55,  p.  330,  Art.  3. 

19.  I.   I'..  Moore,  Internatl.  Law  Digest,  Vol.  2,  p.  639. 

20.  U.  S.  For.  ReL,  1900,  p.  3S7,  ff.  Sec.  Hay  to  Amer.  Min- 
ister at  Peking. 

21.  Hertslet,  Vol.  1,  No.  59,  p.  351,  Art.  1,  the  Kiaochow 
Lease  Convention. 

22.  MacM array,  1898/5,  Art.  1.  The  Lease  of  Port  Arthur 
and  Talicnwan ;  also  see  Art.  1,  Kwangchowwan  Lease,  Hertslet, 
Vol.  1,  No.  55,  p.  329. 

23.  Hertslet,  Vol.  1,  No.  25,  p.  123.  On  account  of  local 
resistance,  however,  the  Chinese  jurisdiction  was  expelled  from 
Kowloon  on  Mav  16,  1899. 

24.  Hertslet,  Vol.  1,  No.  59.  p.  352,  Art.  5. 

25.  State  Papers,  Vol.  98,  pp.  736-737,  Art.  5. 

26.  State  Papers,  Vol.  98,  p.  741,  Treaty  and  Supplementary 
Agreement,  Dec.  22,  1905. 

27.  Trail,  Treaty  Obligations  between  China  and  Other  States, 
p.  70. 

28.  The  Case  of  Caroline,  Moore,  op.  cit.,  Vol.  2,  p.  412. 

29.  Questions  for  Readjustment,  Submitted  by  China  to  the 
Peace  Conference,  p.  21. 


XXI 

SPHERES  OF  INFLUENCE  OR  INTEREST 

Still  another  form  of  the  impairment  of  China's  sov- 
ereignty is  the  sphere  of  influence,  or  the  sphere  of  inter- 
est. These  two  terms  have  been  used  interchangeably,  but 
some  distinction  may  be  made  between  them.  Spheres  of 
influence  generally  carry  a  political  significance,  while 
spheres  of  interest  usually  connote  preferential  economic 
exploitation.  "The  technical  meaning  of  the  term  sphere 
of  interest  is  an  area  or  territory  within  which  a  nation 
claims  the  primary  right  of  exploitation  of  commercial 
and  natural  resources.  The  term  sphere  of  influence  is 
by  some  thought  to  refer  to  a  certain  degree  of  political 
control,  however  slight  it  may  be.  .  .  ."  1 

Bearing  in  mind  the  distinction,  it  can  be  observed 
that  the  sphere  of  influence  or  interest  as  claimed  by 
the  Powers  in  China  are  nothing  more  than  spheres  of 
interest,  wherein  the  claimant  Powers  maintain  priority 
in  economic  exploitation,  and  oppose  the  inroads  of  other 
foreign  influences.  They  are  portions  of  territory 
"wherein  a  nation  expressly  or  impliedly  declares  that 
it  will  permit  no  other  nation  to  exert  political  influence, 
and  that  itself  will  lead  in  exploitation  of  natural  re- 
sources." 2 

It  is  unnecessary  to  narrate  the  origin  <>f  the  spheres  of 
interesl  in  China.  In  a  former  chapter  on  the  Interna- 
tional Struggle  fur  Concessions,  the  story  has  been  told, 
— how  Germany  firsl  created  her  sphere  of  interesl  in 
Shantung  by  tin-  seizure  "i  Kiaochow  and  the  subsequent 
Convention  of  March  6,  1898;  '  how  Russia  foil 
suit  and  established  her  sphere  of  influence  in  Manchuria 

337 


338        IMPAIRMENTS  OF  SOVEREIGNTY 

and  Liaotung  by  the  occupation  of  Port  Arthur  and 
Talienwan  and  the  Convention  of  March  27,  1898 ;*  how 
France  obtained  her  sphere  of  interest  in  Yunnan, 
Kuan  i  and  Kwangtung;  how  Great  Britain  won  the 
recognition  of  her  sphere  of  interest  in  the  Yangtze  Val- 
ley and  Tibet ;  and,  finally,  how  Japan  extended  her 
influence   over    Fukien. 

We  should,  however,  point  out  the  later  developments 
which  deserve  attention.  In  consequence  of  the  Russo- 
Japanese  War,  Japan  succeeded  to  Russia  in  South  Man- 
churia and  Liaotung  as  her  sphere  of  interest,  while  Rus- 
sia retained  North  .Manchuria  as  her  sphere.  By  the 
agreements  of  1907,  1910,  and  1916,  while  there  was  no 
specific  mention  as  to  any  division  of  sphere  of  influence, 
it  was  generally  understood,  at  least  from  subsequent  ac- 
tions,5 that  Russia  regarded  North  Manchuria  and  Outer 
Mongolia  as  her  sphere  of  interest,  and  Japan  South 
Manchuria  and  Eastern  Inner  Mongolia.  Again,  taking 
advantage  of  the  World  War,  Japan  ousted  Germany 
from  Shantung  and  established  herself  as  successor, 
which  was  confirmed  by  Articles  156,  157  and  158  of 
the  Treaty  of  Peace  with  Germany  signed  at  Versailles 
on  June  28,  1919.  Finally,  in  view  of  the  temporary 
retreat  of  the  Russian  influence  in  North  Manchuria  and 
Outer  Mongolia  in  consequence  of  the  Soviet  Revolution, 
Japan  has  made  repeated  endeavors  to  acquire  this  Rus- 
sian sphere  of  interest.8 

Thus,  as  a  result  of  the  elimination  of  the  German  and 
possibly  the  Russian  sphere  of  influence,  and  the  propor- 
tionate expansion  of  the  Japanese  sphere,  it  can  be  said 
that  there  exist  in  China  to-day  only  three  spheres, — the 
French  sphere  in  the  Three  Provinces  bordering  on  Ton- 
kin, the  British  sphere  in  the  Yangtze  Valley  and  Tibet, 
and  the  Japanese  sphere  in  Fukien,  Shantung,  South  Man- 
churia and  Eastern  Inner  Mongolia,  and  possibly  also 
in  North  Manchuria  and  Outer  Mongolia.  A  report  has 
been   made,   which,  however,  has  not  yet  been  substan- 


SPHERES  OF  INFLUENCE  OR  INTEREST    339 

tiated,  that  these  three  Powers  entered  into  a  tripartite 
agreement  at  the  Paris  Peace  Conference  as  to  their  re- 
spective spheres  of  influence  in  the  v  iole  of  Asia.  Those 
regions  which  concern  China  are  as  follows : 

British  sphere :  Tibet,  Szechuan,  the  Kwangtung  region 

forming  the  littoral  of  Canton  and  equal  commercial 

rights  in  the  Yangtze  Valley ; 
French    sphere:    Yunnan,    Kwangsi,     Kweichou    and 

Western  Kwangtung ; 
Japanese    sphere:    All   of    China,    except    the    regions 

above  mentioned,  and  Mongolia.8A 

Whatever  may  be  said  as  to  the  authenticity  of  the  report, 
the  fact  remains  that  there  are  to-day  existing  in  China 
only  three  spheres  of  interest — those  of  France,  Great 
Britain  and  Japan, — and  that  Japan  occupies  the  most 
important,  if  not  the  lion's  share,  of  these  spheres. 

Having  considered  the  origin  and  the  recent  develop- 
ments, we  now  come  to  the  characteristic  features  of  the 
spheres  of  interest  in  China.  The  first  feature  is  the 
strategic  base,  such  as  Kiaochow,  Port  Arthur.  Kwang- 
chowwan  and  Waihaiwai.  While  appertaining  mainly 
to  the  leased  territories,  they  serve,  nevertheless,  as 
points  d'appui  for  the  entire  spheres  of  interest  which 
are  generally  adjacent  thereto.  That  is  to  say.  they  in- 
come the  bases  of  action,  alike  as  the  bases  of  the  eco- 
nomic exploitation  which  must  be  carried  on  within  the 
spheres  and  as  the  bases  of  military  defense  for  their 
nation. 

I  he  second  feature  is  the  railway.  In  order  to  ex- 
ploit the  natural  resources  and  to  dominate  the  economic 
life  of  the  spheres,  the  Powers  interested  projected  rail- 
ways into  them.  Germany  constructed  the  Tsin 
Tsinan  Railway,  which  was  seized  by  Japan  in  1914; 
a  built  the  Chiro  tern  Railway,  the  southern 

portion  of  which  from  Changchun  to  Dalny  and   Port 


340        IMPAIRMENTS  OF  SOVEREIGNTY 

Arthur  was  transferred  to  Japan  in  consequence  of  the 
Russo-Japanese  War  in  1905;  France  constructed  the 
Tongkin-Yunnanfu  line,  and  Great  Britain  built  the 
Shanghai-Nanking,  the  Shanghai-Hangchow-Ningpo  and 
anton-Kowloon  railways.  The  distinction  must  be 
pointed  out,  however,  that  while  the  other  Powers 
adopted  a  more  or  less  exclusive  policy,  Great  Britain 
has,  on  several  occasions,  shared  the  railway  concessions 
in  the  Yangtze  Valley  with  the  other  Powers,  the 
Tientsin-Pukow  Railway  with  Germany,  the  Pukow- 
Smyang  with  France,  and  the  Hukuang  with  France, 
Germany  and  the  United  States. 

The  third  feature  is  the  claim  or  right  of  priority  or 
first  option  in  loans  and  concessions.  Expressly  or  tacitly, 
the  Powers  claiming  spheres  of  influence  assert  their 
prior  rights,  particularly  with  respect  to  railways  and 
mines  within  their  respective  spheres.  In  the  Kiaochovv 
lease  convention  this  was  stipulated,  besides  the  privi- 
lege of  mining  rights  within  ten  miles  of  the  Tsingtao- 
Tsinan  Railway.7 

"If  within  the  Province  of  Shantung  any  matters  are 
undertaken  for  which  foreign  assistance,  whether  in  per- 
sonnel, or  in  capital,  or  in  material,  is  invited,  China 
agrees  that  the  German  merchants  concerned  shall  first 
be  asked  whether  they  wish  to  undertake  the  works  and 
provide  the  materials.  In  case  the  German  merchants 
do  not  wish  to  undertake  the  said  works  and  provide  the 
materials,  then  as  a  matter  of  fairness  China  will  be  free 
to  make  such  other  arrangements  as  suit  her  conven- 
ience." 8 

This  right  of  first  option  is  now  inherited  by  Japan  by 
virtue  of  Article  156  of  the  Treaty  of  Peace  with  Ger- 
many of   1919,  which  reads : 

"Germany  renounces  in  favor  of  Japan  all  rights, 
title   and    privileges, — particularly    those   concerning   the 


SPHERES  OF  INFLUENCE  OR  INTEREST    341 

territory  of  Kiaochow,  railways,  mines  and  submarine 
cables, — which  she  acquired  in  virtue  of  the  Treaty  con- 
cluded by  her  with  China  on  March  6,  1898,  and  of  all 
other  arrangements  relative  to  the  Province  of  Shantung." 

On  September  26,  1914,°  France  received  a  pledge  from 
the  Chinese  Foreign  Office  giving  preference  to  French 
nationals  in  railway  and  mining  enterprises  in  the  Prov- 
ince of  Kwangsi.  In  an  exchange  of  notes  annexed  to 
the  Treaties  of  May  25,  1915, 10  Japan  obtained  first  option 
in  railway  loans  in  South  Manchuria  and  Eastern  Inner 
Mongolia.  In  the  Treaty  with  Outer  Mongolia  of  Sep- 
tember 30,  1914,11  Russia  obligated  her  not  to  grant  any 
railway  concessions  without  first  consulting  Russia. 

The  fourth  feature  leading  to  spheres  of  influence  is 
the  declaration  of  non-alienation.  Practically  in  all  re- 
gions, the  Powers  interested  made  China  declare  that  she 
would  not  alienate  in  any  way  the  regions  in  which  they 
were  interested.  Thus,  France  obtained  the  declaration 
of  non-alienation  regarding  the  Island  of  Hainan  on 
March  15,  1897, 12  and  of  the  provinces  bordering  on  Ton- 
kin on  April  10,  1898. 13  Great  Britain  procured  a  simi- 
lar declaration  respecting  the  Island  of  Chusan,14  and 
Munglem  and  Kiang  Hung.1''  She  also  received  the  same 
pledge  regarding  the  Yangtze  Valley: 

"The  Vaincn  have  to  observe  that  the  Yangtze  region 
is  of  the  greatest  importance  as  concerning  the  who! 
sition   (or  interests)   of  China,  and  it   is  out  of  the  ques- 
tion that  a  territory  (in  it)  should  be  mortgaged,  I<        I, 

or  ceded  to  another   1  ower."  "; 

She  obtained  from  Tibet  through  the  Treaty  of  Septem- 
ber 7,  L904,11  a  pledge  thai  British  consent  must  first 
be  obtained  before  making  territorial  concei  sions  to  other 
foreign  Powers  (Art.  9a),  which  was  subsequently  rec- 
ognized  by  China  in  the  Treaty  of   April   27,    1906." 

In  the  tripartite  agreement  he!  ween   Russia,  China  and 


342        IMPAIRMENTS  OF  SOVEREIGNTY 

Outer  Mongolia,  the  latter  was  to  have  no  right  to 
conclude  any  international  treaty  with  foreign  Powers 
respecting  political  and  territorial  questions  (Art.  3), 
regarding  which  the  Chinese  Government  should  be  obli- 
gati  d  to  come  to  an  agreement  with  the  Russian  Gov- 
ernment through  negotiation  in  which  the  authorities  of 
Outer  Mongolia  should  participate  (Art.  3),  which  is 
tantamount  to,  and  inclusive  of,  the  declaration  of  non- 
alienation  respecting  Outer  Mongolia.  In  1898  Japan 
obtained  the  declaration  of  non-alienation  respecting 
Fukien.10  In  an  exchange  of  notes  annexed  to  the 
Treaty  of  May  25,  1915,  respecting  Shantung,-0  Japan 
was  assured  of  the  non-alienation  of  that  Province. 
Among  the  now  celebrated  Twenty-one  Demands,  Japan 
demanded  the  non-alienation  of  China's  coast  (Group 
IV).-1  This  was  finally  changed  to  a  voluntary  pro- 
nouncement by  China  to  that  effect.*" 

The  fifth  and  last  feature  which,  like  the  previous  one, 
is  also  a  method  of  establishing  or  safeguarding  the 
sphere  of  interest  is  the  international  agreement  between 
the  Powers  interested  pledging  to  respect  the  spheres  per- 
taining to  each.  On  January  15,  1896,  Great  Britain  and 
France  agreed  that  they  would  make  Yunnan  and 
Szechuan  their  common  sphere  of  influence,  rendering 
common  to  both  Powers  all  privileges  and  advantages 
that  China  might  grant  to  either  of  them  (Art.  4)  : 

"The  two  Governments  agree  that  all  commercial  and 
Other  privileges  and  advantages  conceded  in  the  two 
Chinese  provinces  of  Yunnan  and  Szechuan  either  to 
•  Britain  or  to  France,  in  virtue  of  their  respective 
Conventions  with  China  of  the  1st  March,  1894,  and 
the  20th  of  June,  1895,  and  all  the  privileges  and  advan- 
tages of  any  nature  which  may  in  the  future  be  conceded 
in  these  two  Chinese  provinces,  whether  to  Great  Britain 

or  France,  shall,  as  far  as  rots  with  them,  be  extended 
and  rendered  common  to  both  Powers  and  to  their  na- 
tionals  and   dependents,   and  they  engage  to   use   their 


SPHERES  OF  INFLUENCE  OR  INTEREST    343 

influence  and  good  offices  with  the  Chinese  Government 
for  this  purpose."  M 

On  September  2,  1898,  Great  Britain  and  Germany 
covenanted  to  define  and  respect  their  spheres  of  interest 
for  applications  for  railway  concessions : 

"1. — The  British  sphere  of  interest,  viz. — the  Yantze 
Valley,  subject  to  the  connection  of  the  Shantung  lines 
to  the  Yangtze  at  Chinkiang :  the  provinces  south  of  the 
Yangtze,  the  Province  of  Shansi  with  connection  to  the 
Peking-Hankow  line  at  a  point  south  of  Chengting  and 
a  connecting  line  to  the  Yangtze  Valley,  crossing  the 
Hoangho  Valley. 

"2. — ( ierman  sphere  of  interest,  viz. — the  Province 
of  Shantung  and  the  Hoangho  Valley  with  connection  to 
Tientsin  and  Chengting,  or  other  points  of  the  Peking- 
Hankow  line,  in  the  south  with  connection  to  the  Yangtze 
at  Chinkiang  or  Xanking.  The  Hoangho  Valley  is  un- 
derstood to  be  subject  to  the  connecting  lines  in  Shansi 
forming  part  of  the  British  sphere  of  interest,  and  to 
the  connecting  line  to  the  Yangtze  Valley,  also  belonging 
to  the  said  sphere  of  interest."  24 

As  a  further  recognition  of  the  German  sphere  of 
interest,  in  connection  with  the  occupation  of  Weihaiwei, 
Great  Britain  declared  to  Germany: 

"that  in  establishing  herself  at  Weihaiwei,  she  has  no 
intention  of  injuring  or  contesting  tin-  rights  and  inter- 
ests of  Germany  in  the  Province  of  Shantung,  or  of 
creating  difficulties  for  her  in  the  Province  of  Shantung. 
It  is  especially  understood  that  England  will  not  construct 
any  railway  communication  from  Weihaiwei  and  the 
district  leased  therewith  into  the  interior  of  the  Province 
of  Shantung."  M 

On  April  28,  1899,  Greal  Britain  and  Russia  eng       ' 
to   define   and   respect   each   cither's    sphere    of    hit 
Russia  was  to  have  the  region  north  of  the  Great  Wall 


344        IMPAIRMENTS  OF  SOVEREIGNTY 

as  her  sphere  of  interest,  and  Great  Britain  the  Yangtze 
Valley : 

"1.  Great  Britain  engages  not  to  seek  for  her  own 
account,  or  on  behalf  of  British  subjects  or  of  others, 
any  railway  concessions  to  the  north  of  the  Great  Wall 
of  China,  and  not  to  obstruct,  directly  or  indirectly,  appli- 
cations for  railway  concessions  in  that  region  supported 
by  the  Russian  Government. 

"2.  Russia,  on  her  part,  engages  not  to  seek  for  her 
own  account,  or  on  behalf  of  Russian  subjects  or  of 
others,  any  railway  concessions  in  the  basin  of  the 
Yangtze,  and  not  to  obstruct,  directly  or  indirectly,  appli- 
cations for  railway  concessions  in  that  region  supported 
by  the  British  Government."  20 

Similarly,  on  June  10,  1907,  Japan  and  France  engaged 
to  support  each  other  "in  the  regions  of  the  Chinese  Em- 
pire adjacent  to  the  territories  where  they  have  rights 
of  sovereignty,  protection  or  occupation."  -7  On  July  30 
of  the  same  year,  Japan  and  Russia  covenanted  "to  sus- 
tain and  defend  the  maintenance  of  the  status  quo," 
which,  rendered  into  ordinary  language,  means  to  respect 
the  spheres  of  interest  pertaining  to  each.28  On  July  4, 
1910,  Japan  and  Russia  again  entered  into  an  agreement, 
this  time  not  only  to  maintain  the  status  quo,  but  also 
to  take  common  measure  against  external  menace 
(Art.  3)."n  Finally,  on  July  3,  1916,  Japan  and  Russia 
entered  into  two  covenants,  an  open  convention  and  a 
secret  treaty,  the  latter  a  secret  alliance.30 

We  now  come  to  the  legal  status  of  the  spheres  of 
interest.  It  is  to  be  understood  that  these  spheres  are 
not  recognized  in  international  law.  Postulating  the  prin- 
ciple of  territorial  sovereignty  as  supreme  and  exclusive 
in  each  state,  international  law  does  not  admit  the  valid- 
ity of  spheres  of  interest,  except  by  virtue  of  treaty 
stipulations  and   international  agreements.     Like  extra- 


SPHERES  OF  INFLUENCE  OR  INTEREST    345 

territorial  jurisdiction,  they  come  into  existence  and  be- 
come recognized,  not  because  of  any  principle  of  inter- 
national law.  but  rather  by  virtue  of  the  consent  of  the 
territorial  sovereign  as  provided  in  treaty  stipulations  and 
of  the  international  agreements  entered  into  by  the  Pow- 
ers between  themselves.  Hence,  whatever  rights  the 
Powers  interested  have  in  their  respective  spheres  are 
limited  to  the  treaty  stipulations.  "It  cannot  be  irrele- 
vant to  remark  that  'sphere  of  influence'  and  the  theory 
or  practice  of  the  'Hinterland'  idea  are  things  unknown 
to  international  law  and  do  not  as  yet  rest  upon  any 
recognized  principles  of  either  international  or  municipal 
law.  They  are  new  departures  which  certain  great  Euro- 
pean Powers  have  found  necessary  and  convenient  in 
the  course  of  their  division  among  themselves  of  great 
tracts  of  the  continent  of  Africa  and  which  find  their 
sanction   solely  in   their   reciprocal   stipulations."  31 

Further,  the  declarations  of  non-alienation  made  to  the 
various  Powers  concerning  the  different  spheres  do  not 
confer  any  rights  on  the  Powers  concerned,  save  prob- 
ably the  right  to  protest  in  case  China  should  violate 
her  own  declaration.  These  declarations  do  not  in  any 
way  earmark  these  spheres  for  the  eventual  control  or 
annexation  by  the  Powers  concerned.  They  still  remain 
Chinese  territory,  full  and  complete.  Even  should  con- 
trol or  annexation  prove  to  be  necessary,  it  would  have 
to  be  done  through  treaty  stipulations.  Thus,  these  decla- 
rations do  not  detract  from  the  territorial  sovereign  any 
iota  of  his  prerogatives  and  rights,  except  the  right  of 
alienating  the  regions  concerned.  If  they  should  have 
any  effect  it  must  hi-  in  relation  to  a  third  Power.  They 
will  probably  preclude  the  other  Powers  from  obtaining 
similar  special  positions  in  these  spheri  s.  In  ca 
a  break  up  of  China,  which  was  imminent  when  the 
spheres    were   created    in    1S'»S.   but    which   has   become   a 

thing  of  the  past  since  the  Chinese  Revolution  of  1911, 
the    Powers    in   whose    favor   the   declaration   of   non- 


346        IMPAIRMENTS  OF  SOVEREIGNTY 

alienation  was  made,  and  especially  those  who  have  fur- 
ther diligently  safeguarded  their  spheres  by  international 
agreements,  will  have  preemptions  as  to  the  respective 
spheres.  "The  assurance  merely  signifies  that,  if  events 
should  arise  in  the  remote  future  which  may  compel 
him  (the  territorial  sovereign)  to  choose  between  the 
claims  of  different  states,  those  of  the  state  in  whose 
favor  the  declaration  has  been  made  will  be  respected 
to  the  exclusion  of  all  others."  32 

We  cannot  conclude  this  subject  without  pointing  out 
the  serious  disadvantages  of  the  spheres  of  interest  in 
China  with  a  view  to  their  eventual  renunciation  or  abo- 
lition. First,  the  spheres  of  interest  constitute  a  serious 
hindrance  to  the  economic  development  of  China.  As 
the  Powers  dominate  these  spheres,  China  cannot  de- 
velop her  natural  resources,  if  she  needs  foreign  capital, 
as  freely  as  she  pleases,  but  generally  she  must  always 
give  the  first  option  to  the  Powers  claiming  the  spheres. 
This  virtually  gives  a  monopoly  to  the  foreign  Powers 
in  question,  particularly  with  respect  to  foreign  loans. 
This  naturally  results  in  restraint  of  trade,  in  interfer- 
ence with  the  natural  operation  of  the  economic  law  of 
supply  and  demand,  and  in  infringement  of  China's  lib- 
erty of  action.  What  is  worse,  "there  have  been  several 
instances  of  one  nation  or  another  who  was  unable  her- 
self to  supply  the  necessary  capital  or  the  proper  men 
for  a  particular  enterprise  in  a  region  it  claims  for  its 
sphere  of  influence  or  interest  and  yet  who  refused  to 
allow  the  enterprise  either  financed  or  carried  out  by 
other  nations  who  could  supply  both  the  money  and  the 
men."  33 

Second,  these  spheres  of  interest  vitiate  the  principle 
of  equal  opportunity  of  trade.  The  Powers  dominating 
the  regions  generally  possess  preferential  or  exclusive 
rights,  which  preclude  the  possibility  of  competition  on 
an  equal  basis.     The  Powers  in  question  often  so  en- 


SPHERES  OF  INFLUENCE  OR  INTEREST  347 

trench  themselves  in  their  various  spheres  of  interest, 
gathering  into  their  hands  all  the  basic  industries  and 
means  of  communication,  that  they  become  the  dominant 
economic  Power  in  the  spheres,  rendering  equal  oppor- 
tunity of  trade  practically  non-existent. 

Third,  and  worst  of  all,  the  spheres  of  interest  menace 
the  well-being  of  the  nations  and  hence  of  the  world. 
They  tend  to  build  up  in  China  rival  economic  kingdoms, 
competing  with  one  another  for  supremacy  and  aggran- 
dizement. Thus,  they  not  only  grind  down  the  integrity 
and  independence  of  China  in  the  mills  of  their  economic 
imperialism  and  struggle,  but  induce  among  themselves 
antagonism  and  hatred,  giving  rise  to  international  fric- 
tion and  possibly  to  war. 

In  view  of  these  serious  disadvantages,  the  Chinese 
Government,  through  its  Peace  delegation  at  the  Paris 
Conference,  asked  for  the  renunciation  on  the  part  of 
the  Powers  concerned  of  their  claims  to  spheres  of  in- 
terest in  China  and  the  revision  of  treaties  in  consequence 
of   such  renunciation. 

"The  Chinese  Government  hope  that  the  interested 
Powers  will,  out  of  their  sincere  regard  for  the  sover- 
eign rights  of  China  and  the  common  interests  of  all 
nations  having  trade  relations  with  her.  make  a  declara- 
tion, each  for  itself,  to  the  elTect  that  they  have  not  any 
sphere  of  influence  or  interest  in  the  Republic  of  China, 
nor  intend  to  claim  any  ;  and  that  they  are  prepared  to 
undertake  a  revision  of  such  treaties,  agreements,  notes 
or  contracts  previously  concluded  with  her  as  have  con- 
ferred, or  may  be  construed  to  have  conferred,  on  them, 
respectively,  reserved  territorial  advantages  or  inferen- 
tial rights  or  privileges  to  create  spheres  of  influence  or 
interesl  impairing  tin-  sovereign  rights  of  China."   ' 

The  request  failed  ;  but  in  its  place  a  new  champion  has 

arisen  thai  IS  liable  to  demolish  the  economic  barriers 
erected  by  the  institution  of  spheres  of   interest      That 


348       IMPAIRMENTS  OF  SOVEREIGNTY 

is  the  New  International  Banking  Consortium.  While 
paying  due  respect  to  vested  interests,  it  proposes  to  pool 
all  options  of  the  Powers  and  the  concessions  in  which 
no  substantia]  headway  has  as  yet  been  made.35  The 
significance  of  this  measure  cannot  be  overestimated.  It 
means  that  the  Powers  joining  the  Corsortium  surrender 
their  prior  claims  or  rights  to  first  options  in  all  the  loans 
that  come  within  the  scope  of  the  New  Consortium  and 
that  it  chooses  to  undertake.  Thus,  the  New  Consortium 
obliterates  one  of  the  leading  features  of  the  spheres  of 
interest — the  right  of  first  option  or  the  claim  of  pri- 
ority. This  likewise  indicates  that  while  permitting  the 
economic  dykes  as  erected  by  the  spheres  of  interest  to 
remain  intact,  the  New  Consortium  puts  an  injunction 
on  any  further  walls  of  exclusion  that  tend  to  block  the 
common  interests  of  the  Powers  as  well  as  China's  eco- 
nomic development.  Moreover,  in  pooling  options  and 
concessions  in  railways,  the  New  Consortium  tacitly  and 
impliedly  introduces  the  principle  and  practice  of  the 
internationalization  of  Chinese  railways.  When  mate- 
rialized, this  will  have  the  salutary  effect  of  establishing 
royal  roads  of  freedom  running  through  several  spheres 
of  interest  and  of  promoting  the  untrammcled  economic 
development  of  China  and  the  general  well-being  of  the 
Powers  concerned.  Thus,  the  New  Consortium,  incar- 
nating as  it  does  the  Open  Door  doctrine,  is  the  antidote 
and  demolisher  of  the  spheres  of  interest. 


NOTES  TO  CHAPTER  XXI 

1.  Reinsch,  World  Politics,  p.  113. 

2.  [bid,  p.  114. 

3.  Hertslet's  china  Treaties,  Vol.  1,  No.  59,  pp.  350-354. 

4.  Hertslet,  Vol.  I,  No.  !  B,  pp.  505  508. 

5.  Russia   made   Outer    Mongolia   a   buffer   state   and  herself 

suzerain  of  the  same  in  1913  and  1915  (MacMurray, 
1913/11  and  1915/10);  also  sec  chapter  on  the  Policy  of  Russia 
in    China.      Japan's    21    Demands    in    1915    covered    only    South 


SPHERES  OF  INFLUENCE  OR  INTEREST    349 

Manchuria  and  Eastern  Inner  Mongolia.  See  chapter  on  The 
Policy  of  Paramount  Influence  and  on  The  Twenty-one  Demands 
as  an  Exponent  of  Japan's  Policies  in  China. 

6.  Vide  supra,  chapter  on  The  Policy  of  Paramount  Influence. 
6A.    Millard,  China's  Case  at  the  Peace  Conference,  Millard's 

Review,  Supp.,  July  17,  1920,  p.  18. 

7.  Hertslet,  Vol.  1.  No.  59,  p.  353.  Sec.  2,  Art.  4. 

8.  The  Shantung  Question,  submitted  by  China  to  the  Paris 
Peace  Conference,  puhlished  by  the  Chinese  National  Welfare 
Society  of  America,  1920,  App.   No.  1  to  Vol.  2,  p.  50. 

9.  MacMurray,  1895/5. 

10.  MacMurray,  1915/8. 

11.  MacMurray,  1914/12. 

12.  MacMurray,  1897/2. 

13.  MacMurray,  1898/6. 

14.  Hertslet,  Vol.  1,  No.  4,  p.  16.  Art.  3,  Convention  of  April 
4,  1846. 

15.  Art.  5,  Convention  between  Great  Britain  and  China  rela- 
tive to  Burma  and  China,  March  1,  1894,  Hertslet,  Vol.  1,  No. 
20,  p.  104;  also  Art.  5,  Agreement  between  Great  Britain  and 
China  modifying  the  Convention  of  March  1,  1894,  relative  to 
Burma  and  China,  Feb.  4,  1897,  Hertslet,  Vol.  1,  No.  22,  p.  116. 

16.  Hertslet,  Vol.  1,  No.  23,  p.  120,  The  Tsungli  Yamen  to 
Sir  C.  MacDonald,  Feb.  11,  1898. 

17.  MacMurrav,  1906/2. 

18.  MacMurray,  1906/2. 

19.  MacMurrav,  1898/8. 

20.  MacMurray,  1915/8. 

21.  The  Chino-Japanese  Negotiations,  the  Official  Chinese 
Statement,  1915,  p.  21  ;  China  Year  Book,  1919,  p.  567. 

22.  The  Chino-Japanese  Negotiations,  1915,  p.  28. 

23.  MacMurray,  1896/1;  Millard,  Our  Eastern  Question,  App. 
V,  pp.  515,  516. 

24.  MacMurrav,  1900/5;  Millard,  op.  cit.,  App.  I,  p.  444. 

25.  Hertslet,  V->1.  1,  Xo.  102,  p.  584,  Exchange  of  Notes  be- 
tween Great  Britain  and  Germany  respecting  the  British  Occu- 
pation of  Weihaiwei,  April  20,  1898. 

26.  Hertslet,  Vol.  1,  No.  104,  pp.  586-587;  Russia  and  Great 
Britain,  on  August  31,  1907,  again  mutually  pledged  to  abstain 
from  any  interference  or  extension  of  influence  in  Tibet. — 
Hertslet,  Vol.  1,  Xo.  121,  pp.  620-622. 

But  whin  Russia  moved  on  Outer  Mongolia  in  1913  and  1915, 
Greal  Britain  made  the  similar  counter  move— Vide  supra,  chap- 
ter on  the  Policy  of  Greal  Britain  in  China. 

17.    MacMurray,  1907  7;  Millard,  op.  .it.,  App.  M..  pp.  457-458. 

28.  MacMurrav,  1907/11;  Millard,  ibid.,  App.  I),  p.  424. 

29.  MacMurray,  l'MO/1. 

30.  MacMurray,  1916  9. 

31.  U.  S.  For.  ReL,  1896,  pp.  232,  235,  Mr.  Olney,  Secretary 
of  State,  to  Sir  Julian  Pauncefote,  British  Embassador,  Fune  11, 
1896;  J.  B.  Moore,  Internatl.  Law  Dig,  Vol.  1,  pp.  268  269. 


350       IMPAIRMENTS  OF  SOVEREIGNTY 

M  Tvau,  Treaty  Obligations  between  China  and  Other  States, 
p.  90. 

33.  The  Shantung  Question,  op.  cit,  p.  71. 

34.  Ibid.,  p.  71. 

35.  The  United  States  Government  proposed  .  .  .  that  not 
only  future  options  that  might  be  granted  but  concessions  held 
by  individual  banking  groups  in  which  substantial  progress  had 
not  been  made,  should,  so  far  as  feasible,  be  pooled  with  the 
Consortium ;  that  working  on  these  two  principles,  the  operations 
of  the  Consortium  would  serve  to  prevent  for  the  future  the 
setting  up  of  special  spheres  of  influence  in  the  Continent  of 
Asia. — Thomas  W.  Lamont,  Preliminary  Report  on  the  New 
Consortium  for  China,  pp.  6-7. 


XXII 
THE  MOST  FAVORED  NATION  TREATMENT 

Another  form  of  the  impairment  of  China's  sover- 
eignty is  the  operation  or  rather  the  abuse  of  the  most 
favored  nation  clause.  It  was  originally  conceived  in 
a  spirit  to  preserve  the  equality  of  treatment  in  her  rela- 
tions with  foreign  states,  but  in  actual  practice,  it  has 
become  a  fruitful  source  of  embarrassment  and  restraint, 
resulting  in  the  infringement  of  her  sovereignty. 

By  the  most  favored  nation  treatment  is  meant  that 
whatever  privileges,  favors  or  immunities,  with  respect 
to  commerce  and  navigation,  granted  to  a  given  state, 
shall  be  granted  to  others  also.  This  places  the  states 
on  a  footing  of  equality  so  far  as  the  privileges,  favors 
and  immunities  in  matters  regarding  commerce  and  navi- 
gation are  concerned.  This  further  rules  out  any  ex- 
clusive or  discriminating  rights  in  commerce  and  navi- 
gation that  the  territorial  sovereign  may  grant.  It  like- 
wise creates  a  community  of  interest  among  foreign 
states,  inasmuch  as  the  privileges,  favors  or  immunities, 
in  relation  to  commerce  and  navigation,  granted  to  one, 
art-,  ipso  facto,  regarded  as  granted  to  all  enjoying  the 
most  favored  nation  treatment. 

The  origin  of  this  most  favored  nation  clause  goes  back 
to  the  supplementary  treaty  signed  between  Great  Britain 
and  China  in  Hoomun-Chae,  on  October  8,  1843,  follow- 
ing the  Treaty  of  Nanking,  August  29,  1842.  It  was 
stipulated  (Art.  8)  : * 

"The  Emperor  of  China  having  been  graciously  pleased 
to  grant  to  all  foreign  countries  whose  subjects  or  citi- 
zens have  hitherto  traded  at  Canton,  the  privilege  of  re- 

351 


352        IMPAIRMENTS  OF  SOVEREIGNTY 

sorting  for  purposes  of  trade  to  the  other  four  ports  of 
Foochowfoo,  Amoy,  Ningpo  and  Shanghai  on  the  same 
terms  as  the  English,  it  is  further  agreed,  that  should 
the  Emperor  hereafter,  from  any  cause  whatever,  be 
ed  to  grant  additional  privileges  or  immunities  to 
any  of  the  subjects  or  citizens  of  such  foreign  countries, 
the  same  privileges  and  immunities  will  he  extended  to, 
and  enjoyed  by,  British  subjects;  but  it  is  to  be  under- 
stood, that  demands  or  requests  are  not  on  this  plea  to 
be  unnecessarily  brought  forward." 

In  the  Treaty  of  Peace,  Amity  and  Commerce,  between 
the  United  States  and  China,  signed  at  Wanghia,  July 
3,  1844,2  the  most  favored  nation  treatment  was  found 
(Art.  2)  : 

"Citizens  of  the  United  States  .  .  .  shall  in  no  case 
be  subject  to  other  or  higher  duties  than  are  or  shall  be 
required  of  the  people  of  any  other  nation  whatever  .  .  . 
and  if  additional  advantages  or  privileges  of  whatever 
description,  be  conceded  hereafter  by  China  to  any  other 
nation,  the  United  States,  and  the  citizens  thereof,  shall 
be  entitled  thereupon  to  a  complete  equal  and  impartial 
participation  in  the  same." 

In  the  Treaty  of  Whampoa  with  France,  October  24, 
1844,3  similar  most  favored  nation  treatment  was  granted 
(Arts.  6  and  35).  Thus  in  practically  all  the  subse- 
quent treaties  of  commerce,  the  most  favored  nation 
clause  was   found. 

Now  there  are  several  forms  of  the  most  favored 
nation  provision  in  the  Chinese  treaties.  The  first  is 
the  unilateral  and  unqualified  form.  That  is  to  say,  it 
provides  for  unconditional  most  favored  nation  treatment 
by  China  without  at  the  same  time  including  the  reciprocal 
engagement  of  the  Towers  in  question  to  render  the  same 
privileges  in  return  to  China  or  her  citizens.  For  in- 
stance : 


THE  MOST  FAVORED  TREATMENT   353 

"The  British  Government  and  its  subjects  are  hereby 
confirmed  in  all  privileges,  immunities,  and  advantages 

conferred  on  them  by  previous  treaties:  and  it  is  hereby 
expressly  stipulated  that  the  British  Government  and  its 
subjects  will  be  allowed  free  and  equal  participation  in 
all  privileges,  immunities,  and  advantages  that  may  have 
been,  or  may  he  hereafter,  granted  by  His  Majesty  the 
Emperor  of  China  to  the  Government  or  subjects  of  any 
other  nation"  (Art.  54).* 

In  fact,  this  provision  proved  to  be  so  efficacious  that 
when  Japan,  having  defeated  China  in  1895,  made  the 
Treaty  of  Commerce  on  July  21,  1896,  the  same  provision, 
mutatis  mutandis,  was  repeated  (Art.  25 ).5  Again,  in 
the  French  Treaty  of  Tientsin,  June  27,  1858,  it  was  spe- 
cifically stipulated  that  the  French,  while  enjoying  the 
most  favored  nation  treatment,  were,  nevertheless,  not 
subject  to  obligations  not  expressly  provided  in  the 
convention : 

"II  est  d'ailleurs  entendu  que  toute  obligation  non  con- 
signee expresscment  dans  la  presente  Convention  ne 
saura  etre  imposee  aux  Consuls  ou  aux  Agents  Consu- 
laires,  non  plus  qu'a  leurs  nationaux,  tandis  que,  comme 
il  a  ete  stipule,  les  Francais  jouiront  de  tous  les  droits, 
privileges,  immunites  et  garanties  quelconques  qui  au- 
raient  etc  on  qui  seraient  accordes  par  le  Gouvernemenl 
Chinois  a  d'autres   Puissances"   (Art.  40).° 

The  second  form  is  the  reciprocal,  which  means  that 
not  only  China,  hut  also  the  other  contracting  party 
undertakes  identical  obligations.  In  other  words,  it  is 
bilateral  and  reciprocal,  and  not  unilateral.     For  example: 

"The  contracting  parties  agree  that  tin-  Government, 
publi(  .  and  citizens  of  the  Republic  <>t  Peru  shall 

full.-  and  equally  participate  in  .all  privileges,  rights,  im- 
munities, jurisdiction*  and  advantages  that  may  have  be<  a, 
or  m  reafter,  granted  by  Mis  Majesty  the  Em- 


354       IMPAIRMENTS  OF  SOVEREIGNTY 

peror  of  China  to  the  Government,  public  officers,  citi- 
zens or  subjects  of  any  other  nation. 

"In  like  manner,  the  Government,  public  officers,  ;m<l 
subjects  of  the  Empire  of  China  shall  enjoy  in  Peru  all 
the  rights,  privileges,  immunities  and  advantages  of  every 
kind  which  in  Peru  are  enjoyed  by  the  Government,  pub- 
lic officers,  citizens,  or  subjects  of  the  most  favored 
nation."  7 

As  a  further  illustration,  take  the  Treaty  with  Switzer- 
land : 

"It  is  understood  that  a  Treaty  of  Establishment  and 
Commerce  shall  be  negotiated  in  due  time.  Until  such 
a  treaty  shall  have  been  concluded,  the  citizens  of  the 
High  Contracting  Parties  shall  in  all  respects  enjoy  the 
same  privileges  and  immunities  as  are  now  or  may  here- 
after be  granted  to  the  subjects  of  the  most  favored 
nation."  8 

The  third  form  is  the  conditional.  It  signifies  that 
favors  granted  conditionally  must  be  shared  only  upon 
the  fulfillment  of  the  conditions  specified. 

"If  any  concession  is  granted  by  the  Chinese  Govern- 
ment to  any  foreign  <  lovernment  under  special  conditions, 

Portugal,  oil  claiming  the  same  concession  for  herself  and 
for  her  own  subjects,  will  equally  assent  to  the  conditions 
attached  to  it."  8 

The  fourth  form  relates  to  the  special  treatment  arising 
out  of  geographical  contiguity  or  propinquity.  That  is, 
the  special  treatment  is  accorded  only  for  the  sake  of 
geographical  relations  or  positions,  while  the  other  Pow- 
ers, though  enjoying  the  most  favored  nation  treatment, 
cannot  share  the  same  except  upon  fulfilling  the  same 
geographical  relation  or  propinquity.     For  example: 

"II  est  entendu  que  la  France  jouira  de  plein  droit,  et 
sans  qu'il  soit  besoin  de  negotiations  preambles,  de  tous 


THE  MOST  FAVORED  TREATMENT   355 

les  privileges  et  immunites,  de  quelque  nature  qu'ils 
soient,  et  de  tous  les  avantages  commerciaux  qui  four- 
raient  etre  accordes  dans  la  suite  a  la  nation  la  plus 
favorisee  par  des  traites  ou  conventions  ayant  pour  objet 
Jement  des  rapports  politiques  ou  commerciaux 
entre  la  Chine  et  les  pays  situes  au  sud  et  sudouest  de 
l'empire  chinois."  10 

As  a  further  illustration : 

"It  is  agreed  that  the  commercial  stipulations  con- 
tained in  the  present  convention  being  of  a  special  nature 
and  the  result  of  mutual  concessions,  consented  to  with 
w  to  adapting  them  to  local  conditions  and  the  pecu- 
liar necessities  of  the  Burma-China  overland  trade,  the 
advantages  accruing  from  them  shall  not  be  invoked  by 
the  subjects  of  either  Power  residing  at  other  places 
where  the  empires  are  coterminous,  excepting  where  the 
same  conditions  prevail,  and  then  only  in  return  for 
similar  concessions."  X1 

Similarly 

"the  Governments  of  Japan  and  China  engage  that  in 
all  that  relates  to  frontier  trade  between  Manchuria  and 
Corea  most  favored  nation  treatment  shall  be  reciprocally 
extended."  " 

Among  the  Powers  having  treaty  relations  with  China 
those  having  unilateral  and  unqualified  provisions  and 
not  modified  by  subsequent  treaties  arc  Belgium,18  Den- 
mark," Norway,"  France,18  Netherlands,"  Ru 
Spain. 19A  The  states  having  the  reciprocal  form  of  the 
favored  nation  treatment  in  China  arc  (Austria- 
Hungary 19B),  Brazil,20  Congo  Free  State,  "  Mexico,22 
Peru,  n,  l  and  Switzerland.*    The  state  having  the 

conditional  form  of  the  most  favored  nation  treatment 
is  Portugal.***    Those  states  enjc  cial  treatment 

on  account  of  phical  continguity  are  those  states 

having  territories  coterminous  with  that  of  China  :  namely, 


356        IMPAIRMENTS  OF  SOVEREIGNTY 

Great  Britain,*1  France,21  Russia,-8  and  Japan.20  Italy, 
however,  is  in  a  special  class :  she  stipulated,  in  the 
Treaty  of  October  26,  1866,  the  unilateral  and  unqualified 

form  of  the  most  favored  nation  treatment,3"  but  with 
this  additional  engagement : 

"Similmente,  se  alcune  delle  Potenze  Europu  facesse 
alia  China  qualchc  utill  concessions  la  quale  non  fosse 
preguidice-vole  agTinteresse  del  Governo  o  dei  sudditi 
Italiani,  il  Governo  de  Sua  Maesta'  il  Re'  farebbe  oqui 
sforzo  per  adorirvi." 

The  Great  Powers,  except  Russia  and  France,  enjoy- 
ing the  unconditional  and  unilateral  form  of  the  most 
favored  nation  treatment,  have  all  passed  through  suc- 
cessive stages  of  modification.  Great  Britain  began  with 
the  unilateral  and  unqualified  form,  as  we  have  seen  in 
Article  8  of  the  treaty  of  October  8,  1843,  which  was 
again  confirmed  by  Article  54  of  the  treaty  of  Tientsin, 
June  26,  1858,31  but  by  Article  1  of  the  supplementary 
convention  of  October  23,  1869,  she  assented  to  the  con- 
ditional form : 

"China  having  agreed  that  British  subjects  shall  par- 
ticipate in  all  advantages  accorded  by  treaty  to  the  sub- 
jects of  other  Powers,  it  is  further  agreed  that  British 
subjects  desiring  to  participate  in  the  advantages  accorded 
by  treaty  to  the  subjects  of  other  Powers  shall  partici- 
pate in  such  advantages  on  the  same  conditions  on  which 
they  have  been  accorded  to,  and  are  participated  in  by, 
the  subjects  of  such  other  Powers."  S2 

In  the  subsequent  treaty  of  March  1,  1894,  relative  to 
Burma  and  China,  she  conceded  the  reciprocal  form, 
provided,  however,  that  the  language  employed  therein 
could  be  interpreted  to  include,  not  only  Burma  and  the 
parts  of  China  continguous  thereto,  but  the  whole  of 
Great  Britain  and   China: 


THE  MOST  FAVORED  TREATMENT   357 

"It  is  agreed  that  subjects  of  the  two  Powers  shall  each 
within  the  territories  of  the  other  enjoy  all  the  privileges, 
immunities,  and  advantages  that  may  have  been,  or  may 
hereafter  be,  accorded  to  the  subjects  of  any  other 
nation."  33 


Likewise,  the  United  States  began  with  a  unilateral  and 
unqualified  form,  as  we  have  seen  in  Article  2  of  the 
Treaty  of  Wanghia,  July  3,  1844,"-'  but  in  the  Treaty  of 
July  28,  1868,  she  permitted  the  reciprocal  form  to  be 
used : 

"Citizens  of  the  United  States  visiting  or  residing  in 
China  shall  enjoy  the  same  privileges,  immunities,  or 
exemptions  in  respect  to  travel  or  residence  as  may  there 
be  enjoyed  by  the  citizens  or  subjects  of  the  most  fa- 
vored nations :  and,  reciprocally,  Chinese  subjects  visit- 
ing or  residing  in  the  United  States  shall  enjoy  the  same 
privileges,  immunities  or  exemptions  in  respect  to  travel 
or  resid  nee  as  may  there  be  enjoyed  by  the  citizens  or 
subjects  of  the  most  favored  nation ;  "  30 

covering  the  rights  of  education  and  the  establishment  of 
educational  institutions  (Art.  7),  but  excepting  the  right 
of  naturalization  (Art.  6).  While  there  is  no  treaty 
stipulation  conceding  the  conditional  form,  it  is  reason- 
able to  believe,  inasmuch  as  the  United  States  has  per- 
sistently maintained  the  interpretation  of  the  most  fa- 
vored nation  treatment,  that,  in  absence  of  any  qualifi- 
cation, the  provision  is  to  be  construed  as  implying  the 
limitation  of  conditions  or  concessions,  so  that  there  is 
no  necessity  for  any  express  provision  in  the  treaty. 
Hence,  as  the  United  States  maintains  that  rule  of  inter- 
pretation, it  is  within  reason  to  believe  that  the  United 
States  will,  to  be  consistent,  construe  her  treaty  stipula- 
tions as  conditional  or  qualified,  even  in  the  absence  of 

specific  mention  of  qualifications  or  conditions. 

Similarly,   Japan  commenced   with  a  unilateral  or  un- 


358       IMPAIRMENTS  OF  SOVEREIGNTY 

qualified  form,  as  we  find  in  Article  6  of  the  Treaty  of 
April  17,  1895,36  and  in  Articles  9  and  25  of  the  Treaty 
of  July  21,  18%.:iT  In  the  treaty  of  commerce,  October 
8,  1903,  however,  she  conceded  the  reciprocal  treatment: 

"It  is  hereby  expressly  stipulated  in  addition  that  the 
Japanese  Government,  officers,  subjects,  commerce,  navi- 
gation, shipping,  industries,  and  properties  of  all  kinds 
shall  be  allowed  free  and  full  participation  in  all  privi- 
leges, immunities,  and  advantages  which  have  been  or 
may  hereafter  be  granted  by  His  Majesty  the  Emperor 
of  China  or  by  the  Chinese  Government  or  by  the  pro- 
vincial or  local  administrations  of  China  to  the  Govern- 
ment, officers,  subjects,  commerce,  navigation,  shipping, 
industries,  or  property  of  any  other  nation. 

"The  Japanese  Government  will  do  its  utmost  to  se- 
cure to  Chinese  officers  and  subjects,  residents  in  Japan, 
the  most  favorable  treatment  compatible  with  the  laws 
and  regulations  of  the  empire."  38 

Germany  also  set  out  with  a  unilateral  and  unqualified 
form.30  In  the  subsequent  supplementary  convention  of 
March  31,  1880,  however,  she  agreed  to  the  conditional 
form,  engaging  to  observe  the  necessary  regulations  at- 
tached to  the  privileges,  favors,  or  immunities: 

"Article  XL  (referring  to  most  favored  nation  treat- 
ment, quoted  above)  of  the  Treaty  of  the  2nd  September, 
1861,  is  not  affected  by  this  regulation,  and  is  h 
expressly  confirmed. 

"Should  German  subjects,  on  the  strength  of  this  arti- 
cle, claim  privileges,  immunities  or  advantages  which  the 
Chinese  Government  may  further  concede  to  another 
Power,  or  the  subjects  of  such  Power,  they  will  also 
submit  to  the  Regulations  which  they  have  agreed  upon 
in  connection  with  such  concession."  40 

Turning  now  to  the  interpretation  and  the  limitations 
of  the  most  favored  nation  treatment,  we  find  that  there 
are  two  schools  of  interpretation.    The  first  school  is  that 


THE  MOST  FAVORED  TREATMENT      359 

of  a  strict  and  literal  interpretation,  and  it  finds  it  expo- 
nent in  Great  Britain,  who  is  at  the  same  time  the  cham- 
pion of  free  trade.  It  maintains  that,  in  absence  of  any- 
specific  stipulation  limiting  or  qualifying  the  most  fa- 
vored nation  clause,  the  treatment  resulting  therefrom 
is  to  be  construed  as  unconditional  or  without  equivalent. 
That  is  to  say,  no  matter  whether  the  favor  or  privi- 
lege or  concession  is  granted  on  condition  or  for  a  con- 
sideration, the  same  favor  or  privilege  or  concession 
must  be  shared  by  the  most  favored  nation  states  with- 
out fulfilling  the  requisite  condition  or  rendering  the  same 
reciprocal  concession  or  compensation.  Voicing  the  sen- 
timent of  Great  Britain,  Earl  Granville,  in  1885,  wrote: 

"From  this  (the  American)  interpretation  Her  Maj- 
esty's Government  entirely  and  emphatically  dissent.  The 
most  favored  nation  clause  has  now  become  the  most 
valuable  part  of  the  system  of  commercial  treaties,  and 
exists  between  almost  all  the  nations  of  the  earth.  It 
leads  more  than  any  other  stipulation  to  simplicity  of 
tariffs  and  to  ever-increased  freedom  of  trade;  while 
the  system  now  proposed  would  lead  countries  to  seek 
exclusive  markets  and  would  thus  fetter  instead  of  liber- 
ating trade. 

"It  is,  moreover,  obvious  that  the  interpretation  now 
put  forward  would  nullify  the  most  favored  nation 
clause;  for  any  country,  say,  France,  though  bound  by 
the  most  favored  nation  clause  in  her  treaty  with  Bel- 
gium, might  make  treaties  with  any  other  country  in- 
volving reduction  of  duty  on  both  sides,  and,  by  the  mere 
Hon    of    a    statement    that    tl  ductiona    were 

granted  reciprocally  and  Eor  a  consideration,  might  yet 
grant  them  to  Belgium  un  anted 

what  France  mighl  consider  an  equivalent. 
"Such  a  system  would  press  most  hardly  on  those  coun- 
which  had  already  reformed  their  tariffs,  and  had 
no  equivalent  concession  to  offer,  and  therefore  Greal 
in,  which  has  reformed  her  tariff,  is  most  deeply 

interested  in  resisting  it."41 


360       EMPAIRMENTS  OF  SOVEREIGNTY 

The  second  school  is  that  of  liberal  and  practical  inter- 
pretation which  finds  its  spokesman  in  the  United  States 
who  is  also  at  the  same  time  the  champion  of  protection. 
It  contends  that,  in  the  absence  of  any  specific  stipula- 
tion limiting  or  qualifying  the  ordinary  simple  most 
favored  nation  clause,  the  treatment  is  construed  to  cover 
only  gratuitous  favors  and  does  not  apply  to  those 
granted  for  a  consideration  or  on  condition.  Hence,  the 
clause  is  not  to  be  interpreted  literally,  but  to  be  given 
an  implied  understanding  of  excluding  its  application 
from  favors  granted  for  a  reciprocal  concession  or  on 
condition.  Expressing  the  view  of  the  United  States  Gov- 
ernment,  Mr.  Bayard  in   1886  said: 

"You  will  doubtless  have  understood  that  where  the 
words  'qualified'  and  'unqualified'  are  .  .  .  applied  to  the 
most  favored  nation  treatment,  they  are  used  merely  as 
a  convenient  distinction  between  the  two  forms  such  a 
clause  generally  assumes  in  treaties :  one  containing  a 
proviso  that  any  favor  granted  by  one  of  the  contracting 
parties  to  a  third  party  shall  likewise  accrue  to  the  other 
contracting  party,  freely  if  freely  given,  or  for  an  equiva- 
lent if  conditional;  the  other  not  so  amplified.  This 
proviso,  when  it  occurs,  is  merely  explanatory,  inserted 
out  of  abundant  caution.  Its  absence  does  not  impair 
the  rule  of  international  law  that  such  concessions  are 
only  gratuitous  (and  so  transferable)  as  to  third  parties 
when  not  based  on  reciprocity  or  mutually  reserved  inter- 
ests as  between  the  contracting  parties.  This  ground 
has  been  long  and  consistently  maintained  by  the  United 
States.  It  was  held  by  two  of  my  predecessors,  Mr.  (  'lay 
and  Mr.  Livingston,  that  a  covenant  to  extend  to  third 
parties  privileges  granted  to  a  most  favored  nation  only 
refers  to  gratuitous  privileges,  and  does  not  cover  privi- 
granted  on  the  condition  of  a  reciprocal  advan- 
i.c.  for  a  consideration  expressed."  4J 

It  is  further  maintained  that  the  extension  of  the  same 
privileges  or  favors  to  a  most  favored  nation  state  as 


THE  MOST  FAVORED  TREATMENT  361 

have  been  secured  by  other  states  at  a  price  or  on  con- 
dition or  for  special  consideration  will  tend  to  destroy 
the  equality  of  treatment  which  the  clause  aims  to  pre- 
serve, and  thus  make  that  state  more  favored  than  the 
most  favored,  which  the  clause  purposes  to  prevent. 

".  .  .  The  allowance  of  the  same  privileges  and  the 
same  sacrifice  of  revenue  duties,  to  a  nation  which  makes 
no  compensation,  that  have  been  conceded  to  another 
nation  for  an  adequate  compensation,  instead  of  main- 
taining, destroys  that  equality  of  market  privileges  which 
the  most  favored  nation  clause  was  intended.  It  concedes 
for  nothing  to  one  friendly  nation  what  the  other  gets 
only  for  a  price.  It  would  thus  become  one  source  of 
international  inequality  and  provide  international  hos- 
tility.""3 

Holding  the  same  view,  the  United  States  Supreme  Court 
laid  down  the  decision  in  Bartram  vs.  Robertson : 44 

"Our  conclusion  is  that  the  Treaty  with  Denmark 
does  not  bind  the  United  States  to  extend  to  that  coun- 
try, without  compensation,  privileges  which  they  have 
conceded  to  the  Hawaiian  Islands  in  exchange  for  valu- 
able concessions." 

In  conjunction  with  the  two  different  schools  of  inter- 
pretation, the  limitations  or  legitimate  bounds  of  the  most 
favored  nation  clause  should  also  be  noticed.  Within 
certain  limits,  it  is  a  precious  article.  It  guarantees 
equality  of  treatment  and  prevents  discrimination.  But 
beyond  its  legitimate  bounds  it  occasions  inequality,  in- 
justice, and  unreasonable  restraint  of  liberty  of  action 
on  the  part  of  the  grantor.  As  there  are  numerous  limi- 
tations, suffice  it  to  poinl  oul  the  important  ones. 

The  first  limitation  is  that  the  clause  applies  mainly 
to  matters  of  commerce  and  navigation.  It  is  intended 
to  prevent  discrimination  in  commercial  affairs,  particu- 
larly in  tariff,  tonnage  and  transportation  rates.    Its  scope 


362        IMPAIRMENTS  OF  SOVEREIGNTY 

docs  not  extend  to  political  and  other  privileges.  In  1913, 
regarding  the  Japanese  protest  against  the  Alien  Land 
Holding  Act  of  California,  it  was  said: 

"The  most  favored  nation  clauses  universally  relate 
to  matters  of  commerce  and  navigation;  that  alien  own- 
ership of  land  has  seldom  been  treated  in  the  practice 
of  the  United  States  as  a  matter  of  most  favored  nation 
treatment,  but  has  been  secured  only  by  special  treaty 
stipulations."  4G 

The  second  limitation  is  the  reciprocal  concession.  If 
a  favor  or  privilege  is  granted  for  a  consideration  or  with 
reciprocal  compensation,  the  same  favor  or  privilege  can 
be  shared  only  upon  offering  the  same  consideration  or 
compensation.  This  is  in  accord  with  the  practice  of 
reciprocity. 

"This  quality  of  reciprocity,  which  takes  a  case  out 
of  the  category  of  gratuitousness,  belongs,  I  apprehend, 
to  all  our  concessions  to  foreign  states.  .  .  .  Such  con- 
cessions are  based  on  reciprocity.  We  give  the  rights 
to  them  because  they  give  the  right  to  us.  Hence,  such 
privileges  cannot  be  claimed  under  the  most  favored 
nation  clause  by  foreign  Governments  to  which  they  are 
not  specifically  ceded."  *n 

The  third  limitation  is  the  conditional  grant.  That 
is,  if  the  concession  or  favor  is  granted  on  certain  con- 
ditions, the  same  concession  or  favor  can  be  shared  or 
claimed  by  another  power  only  upon  fulfillment  or  observ- 
ance of  the  stipulated  conditions.  As  the  conditions  re- 
quired for  the  enjoyment  of  the  favor  or  concession  are 
usually  provided  so  as  to  safeguard  its  proper  use,  it 
is  essential  that  the  conditions  specified  should  be  ful- 
filled before  the  enjoyment  of  the  favor  or  concession 
can  be  sanctioned.  Upholding  this  view,  Mr.  Olney,  in 
connection  with  the  question  of  American  citizens  avail- 
ing themselves  of  Japanese  protection  in  regard  to  patents, 
trademarks,  and  designs,  wrote  in  1896: 


THE  MOST  FAVORED  TREATMENT   363 

"The  Japanese  contention  is  .  .  .  that  if  a  favor  for 
a  specific  condition  be  stipulated  with  any  other  nation, 
no  other  may  enjoy  the  favor  except  upon  identical  or 
equivalent  conditions.  'The  theory  on  which  this 
Government  views  the  question  is  akin  to  that  of 
Japan.'  .  .  ."  <7 

The  fourth  limitation  is  special  treatment  due  to  geo- 
graphical propinquity.  Thus,  if  one  state  adjoins  an- 
other, and,  by  virtue  of  geographical  contiguity,  it  con- 
cedes special  privileges  to  the  other,  the  other  states, 
though  enjoying  the  most  favored  nation  treatment,  can- 
not claim  the  same  special  privileges,  unless  they  can  also 
come  into  an  identical  geographical  relationship.  In  a 
note  of  February  16,  1886,  while  protesting  against  dis- 
crimination in  tonnage  dues  under  the  authority  of  the 
act  of  June  26,  1884,  the  German  Government  admitted : 

"It  cannot  be  doubted,  it  is  true,  that  on  grounds  of 
a  purely  local  character,  certain  treaty  stipulations  be- 
tween two  Powers,  or  certain  advantages  automatically 
granted,  may  be  claimed  of  third  states  not  upon  the 
ground  of  a  most  favored  nation  clause.  Among  these 
are  included  facilities  in  reciprocal  trade  on  the  border, 
between  States  whose  territories  adjoined  each  other.  It 
is,  however,  not  to  be  doubted  that  the  international  prac- 
tice is  that  such  facilities,  not  coming  within  the  scope 
of  a  most  favored  nation  clause,  an-  not  admissible 
within  their  restricted  zones.  .  .  ."  4H*° 

The  frontier  trade  between  China  and  France,  <>r  Great 
Britain,  or  Russia,  or  Japan,  enjoys  a  reduction  of  about 
One-third  <>f  the  prevailing  tariff  rates  which  is  not  claim- 
able under  the  most  favored  nation  clause  except  upon 
the  fulfillment  of  identical  geographical  relationships. 
'I  he  fifth  limitation  is  the  retaliatory  discrimination. 

A  state  can  retaliate  fur  unequal  and  Unreasonable  treat- 
ment, which  does  i)"t  fall  within  the  protection  of  the 
most  favored  nation  clause.     For  instance,  in  response  to 


364       IMPAIRMENTS  OF  SOVEREIGNTY 

a  protest,  based  on  the  most  favored  nation  treatment, 
made  by  Columbia  Oil  March  23,  18r>2,  against  the  proc- 
lamation in  pursuance  of  the  McKinley  Act  of  October 
1.  L890,  authorizing  the  President  of  the  United  States 
to  retaliate  in  tariff  rates  upon  certain  products,  Mr. 
Blaine  said:  "The  law  cited  applies  the  same  treatment 
to  all  countries  whose  tariffs  are  found  by  the  President 
to  be  unequal  and  unreasonable."  50 

The  sixth  limitation  is  the  bounties.  By  this  is  meant 
that  a  state  can  levy  additional  duty  on  goods  which  have 
received  bounties  at  home,  so  as  to  equalize  the  cost  of 
these  goods.  "Lord  Salisbury,  July  15,  1899,  replied  that 
the  Russian  system,  under  which  the  excise  duty  on 
sugars  is  repaid  in  case  of  exportations,  created  an  'arti- 
ficial stimulus,'  which  had  the  same  effect  as  'a  bounty 
of  a  more  direct  character.'  .  .  .  Wherever  an  artificial 
preference  was  produced  by  the  direct  legislative  act 
of  a  Government  which  was  a  party  to  the  most  favored 
nation  stipulation,  the  other  Government  might  'redress 
the  balance  of  trade  which  has  thus  been  artificially  dis- 
turbed.' .  .  ."«  Again,  on  "November  20,  1902,  Lord 
Lansdowne,  replying  to  the  Russian  memorandum,  stated 
that  .  .  .  the  course  they  had  taken  was  .  .  .  dictated 
solely  by  a  desire  to  secure  'equality  of  conditions'  for 
those  engaged  in  the  production  and  refining  of  sugar; 
and  as  other  states  did  not  hesitate  to  impose  high  and 
prohibitive  tariffs  for  the  protection  of  their  trade  in  their 
own  markets,  His  Majesty's  Government  failed  to  see 
with  what  reason  the  Russian  Government  could  'com- 
plain of  a  measure  out  of  favor,  but  of  simple  and  ele- 
mentary justice  to  British  trade.'"52 

With  these  limitations  in  mind,  let  us  now  consider  the 
IS  or  excesses  in  the  operation  or  application  of  the 
most    favored   nation  clause  in  China.      First,   it   is   not 
limited  to  matters  of  commerce  and  navigation,  but  ex- 
ceeding its  legitimate  bounds,  it  claims  to  include  politi- 


THE  MOST  FAVORED  TREATMENT   365 

cal  and  other  privileges.  For  example,  the  first  article 
of  the  Treaty  of  July  10,  1898,  with  the  Congo  Free  State, 
specifically  mentions  that  the  most  favored  nation  treat- 
ment is  to  include  privileges  of  jurisdiction  which  cannot 
mean  any  other  than  political  privileges: 

"All  privileges  of  person,  property,  and  jurisdiction  en- 
joyed by  foreign  nations  under  the  Treaties  concluded  by 
China  shall  from  henceforth  be  granted  to  the  Congo 
Free  State."53 

As  a  further  illustration,  in  demanding  the  right  to  propa- 
gate Buddhism  in  China,  in  1915,  Japan  based  her  demand 
on  the  most  favored  nation  clause,  arguing  that  inas- 
much as  the  other  Treaty  Powers  were  given  the  right 
to  propagate  Christianity  by  the  operation  of  the  most 
favored  nation  clause,  she  should  have  a  similar  right 
to  propagate  Buddhism  in  China ;  to  which  China  replied 
that  the  scope  of  the  most  favored  nation  clause  was 
limited  to  mere  matters  of  commerce  and  navigation  and 
did  not  extend  to  religious  propagation  except  by  specific 
treaty  stipulations.54 

Second,  it  is  unilateral  and  not  reciprocal,  unqualified 
and  unconditional.  As  we  have  seen,  in  the  treaties  with 
Belgium,  Denmark,  France,  the  Netherlands.  Russia, 
Norway,  and  Spain,  the  unilateral  and  unqualified  form 
of  the  most  favored  nation  treatment  is  stipulated.  Thus, 
no  matter  whether  China  concedes  favors  or  advanl 
for  consideration  or  on  condition,  these  rowers  may 
claim  the  favors  or  advantages  in  question  rind  yel  refuse 
to  offer  the  same  consideration  or  concession  or  fulfill 
the  same  condition.  In  consequence,  these  states  enjoy- 
ing the  unilateral  and  unqualified  form  of  the  mosl  fa- 

d   nation   treatment    can   enjoy    more   privileges   than 

the  other  states  obligated  to  give  i  >n  or  to  fulfill 

conditions,  thus  resulting  in  inequality  of  treatment,  inter- 
national  friction  and  want  of  reciprocity,  and  so  defeat- 


366       IMPAIRMENTS  OF  SOVEREIGNTY 

ing  the  very  purposes  for  which  the  clause  was  originally 
invoked. 

Third,  because  of  existing  practices  in  connection  with 
this  clause,  China  practically  cannot  carry  out  many 
reforms  or  undertake  several  vital  measures  without  the 
unanimous  consent  of  the  Powers  enjoying  the  most  fa- 
vored nation  treatment.  Having  conceded  to  one  Power 
the  right  to  be  consulted  on  certain  matters,  by  the  un- 
justifiable application  of  the  clause,  all  the  other  Powers 
claim  the  same  right.  Thus,  China  cannot  regulate  or 
change  her  tariff  without  the  unanimous  consent  of  the 
Powers  enjoying  the  most  favored  nation  treatment;  and 
this  experience  has  proved  to  be  quite  impossible,  or  at 
least  extremely  difficult,  to  obtain. 

In  view  of  these  serious  disadvantages  resulting  from 
the  present  operation  of  the  most  favored  nation  clause 
in  China,  the  Chinese  Government,  through  its  Delega- 
tion, applied  to  the  Paris  Peace  Conference  for  the 
insertion,  in  the  preliminaries  of  Peace  with  Germany 
and  Austria-Hungary,  of  a  provision  for  the  adoption 
of  the  principles  of  equality  and  reciprocity  as  the  basis 
of  a  new  treaty  of  commerce  and  for  the  relinquishment 
of  the  most  favored  nation  treatment.  The  desired  inser- 
tion reads : 

"Germany  engages  to  adopt  the  principles  of  equality 
and  reciprocity  as  the  basis  of  a  new  treaty  of  commerce 
and  general  relations  to  be  concluded  with  China  and 
relinquish  therein  on  her  part  the  principle  of  the  so- 
called  most  favored  nation  treatment ;  and  the  said  new 
treaty,  when  concluded,  shall  guide  all  intercourse  be- 
tween the  two  countries  in  future."65 

It  must,  however,  be  observed  that  this  policy  of  relin- 
quishing the  most  favored  nation  clause  from  the  future 
treaties  of  commerce  of  China,  as  evidently  adopted  at 
the  Paris  Peace  Conference,  is  difficult  to  carry  out  and 
probably  unwise  to  pursue.  In  the  first  place,  the  Pow- 
ers enjoying  the  most  favored  nation  treatment  will  not 


THE  MOST  FAVORED  TREATMENT   367 

be  willing  to  relinquish  the  clause  which  is  considered 
as  the  cornerstone  of  their  commercial  rights  in  China. 
In  their  eyes  this  little  provision  is  priceless.  It  contains 
all  the  essentials  of  their  commercial  privileges  in  China. 
In  the  second  place,  judging  solely  from  the  point  of  view 
of  China,  it  would  not  be  wise  to  relinquish  the  clause 
totally,  however  obnoxious  is  its  operation  at  present. 
For  if  China  demands  that  this  clause  should  be  elimi- 
nated from  all  future  treaties  of  commerce,  to  be  con- 
sistent, she  will  have  to  relinquish  the  same  clause  or 
rather  the  same  treatment  which  she  now  enjoys,  or  will 
enjoy,  in  other  states.  Hence,  in  following  the  principle 
of  reciprocity,  inasmuch  as  she  would  not  give  other 
states  the  most  favored  nation  treatment,  she  would  not 
receive  the  same  treatment  from  other  states.  If  she  does 
not  desire  to  enjoy  this  treatment,  she  may  consistently 
ask  for  the  relinquishment  of  the  clause  by  the  other 
states;  but  if  she  does  desire  to  retain  the  same  privi- 
lege, then  such  a  policy  of  relinquishment  will  merely 
injure  herself. 

Relinquishment  being  practically  impossible  and  un- 
wise, the  solution  of  this  problem  seems  to  lie  in  a 
compromise,  that  is,  in  retaining  the  clause  and  yet  at 
the  same  time  limiting  its  operation  within  legitimate 
bounds.  The  clause  should  still  be  retained  in  all  China's 
commercial  treaties  that  have  been,  or  may  be,  concluded, 
thus  satisfying  the  foreign  states  and  at  the  same  time 
preserving  the  most  favored  nation  treatment  for  her- 
self. It  should,  however,  be  hedged  about  on  all  sides. 
It  should  be  limited  exclusively  to  commerce  and  navi- 
gation, and  should  not  be  permitted  to  extend  to  political 
and  other  matters.  It  should  be  bilateral  and  reciprocal, 
and  not  unilateral  and  non-compensating.  It  should  be 
qualified  and  conditional,  and  not  unlimited  and  uncon- 
ditional. A  sample  form  of  such  a  most  favored  nation 
clause, — qualified,  Conditional,  and  reciprocal,  and  lim- 
ited to  commerce  and  navigation, — is  as  follows : 


368        IMPAIRMENTS  OF  SOVEREIGNTY 

"The  high  contracting  parties  agree  that  in  all  that  con- 
cerns  navigation  and  commerce,  Favors  which  either  has 
already  granted  or  may  hereafter  grant  to  any  other 
state  shall  become  common  to  the  other  party  who  shall 
enjoy  the  same  freely  if  the  concession  is  freely  made; 
or  upon  allowing  the  same  compensation  if  the  conces- 
sion is  conditional."  60 

Thus  can  China  retain  for  herself  the  advantages  of 
the  reciprocal  most  favored  nation  treatment,  and  satisfy 
the  commercial  Powers  that  are  determined  to  build  their 
trade  relations  upon  the  cornerstone  of  the  clause.  Thus, 
above  all,  can  she  liberate  herself  from  the  bondage  of 
the  present  unlimited  and  excessive  application  of  the 
clause. 


NOTES  TO  CHAPTER  XXII 

1.  State  Papers,  Vol.  31,  p.  133. 

2.  State  Papers,  Vol.  32,  p.  791. 

3.  Hertslet's  China  Treaties,  Vol.  1,  No.  39,  p.  258  et  seq. 

4.  Hertslet,  Vol  1,  Xo.  6,  p.  34,  Treaty  of  Tientsin,  June  26, 
1858. 

5.  Hertslet,  Vol.  1,  No.  64,  p.  381,  Art  25. 

6.  Hertslet,  Vol.  1,  No.  40,  p.  284,  Art.  40. 

7.  Hertslet,  Vol.  1,  No.  71,  p.  419,  Art.  16,  Treaty  with  Peru, 
June  26,  1874. 

8.  MacMurray,  1918/8,  Declaration  attached  to  the  Treaty  of 
Amity,  July  13,  1918,  between  China  and  Switzerland. 

9.  Hertslet,  Vol.  1,  No.  73,  p.  426,  Art.  10,  Treaty  with  Por- 
tugal, Dec.  1,  1887. 

10.  Hertslet,  Vol.  1,  No.  48,  p.  313,  Art.  12,  Additional  Con- 
vention with  France,  June  26,  1887. 

11.  Hertslet,  Vol.  1,  No.  20,  pp.   108-109,  Art.  18,  Convention 
with  Great  Britain  respecting  Burma  and  China,  Mar.  1,  1894. 

12.  Hertslet,    Vol.    1,    No.    67,    p.    397,    Art.    11,    Treaty    with 
Japan  of  Dec.  22,  1905. 

13.  Hertslet,  Vol.  1,  No.  34,  p.  233,  Art.  45,  Treaty  of  Nov.  2, 
1865. 

14.  Hertslet,  Vol.  1,  No.  38,  pp.  253,  257,  Treaty  of  July  13, 
1863,  Arts.  23  and  54. 

15.  Hertslet,    Vol.    1,   No.  93,   pp.  527-528,   Art.  2,   Treaty  of 
March  20,  1847. 

16.  Hertslet,  Vol    1,  No.  39,  p.  268,  Treaty  of  Whampoa,  Oct 
24,  1844,  Art.  35;  also  Art.  40,  Treaty  of  Tientsin,  June  27,  1858, 


THE  MOST  FAVORED  TREATMENT   369 

Hertslet,  Vol.  1,  Xo.  40,  p.  284;  also  Art.  3,  Treaty  of  April  25, 
1886,  Hertslet,  Vol.  1,  No.  47,  p.  302;  also  Art.  7,  Treaty  of 
June  26,  1887,  Hertslet,  Vol.  1,  No.  48,  p.  313. 

17.  Hertslet,  Vol.  1,  Xo.  70,  p.  414,  Art.  15,  Treaty  of  Oct.  6, 
1863. 

18.  Hertslet,  Vol.  1,  Xo.  82,  pp.  460-461,  Art.  12,  Treaty  of 
June  13,  1858. 

19A.  Hertslet,  Vol.  1,  No.  91,  p.  520,  Treaty  of  Oct.  10,  1864, 
Arts.  47  and  50.  It  will  be  noticed  that  the  reciprocity  in  this 
case  was  limited  only  to  the  trade  with  the  Philippine  Islands, 
and  that  as  the  Philippine  Islands  are  now  in  the  possession  of 
the  United  States,  this  reciprocal  treatment  is  therefore  nullified. 

19B.  Hertslet,  Vol.  1,  Xo.  33,  pp.  222-223,  Art.  43.  Treatv  of 
Sept.  2,  1869. 

20.  Hertslet,  Vol.  1,  No.  35,  pp.  236-237,  Arts.  5  and  8,  Treaty 
of  Oct.  3,  1881.  It  will  he  noticed  that,  in  the  case  of  Brazil,  the 
most  favored  nation  treatment  is  not  only  reciprocal  but  also 
conditional.     Art.  5. 

21.  Hertslet.  Vol.  1,  No.  36,  pp.  240-241,  Arts.  1  and  2,  Treaty 
of  Julv  10,  1898. 

22.  Hertslet,  Vol.  1,  No.  69,  p.  402,  Treaty  of  Dec.  14,  1899, 
Art.  8. 

23.  Hertslet,  Vol.  1,  Xo.  71,  p.  419,  Art.  16,  Treaty  of  June  26, 
1874. 

24.  MacMurray,  1908/11,  Arts.  3  and  4. 

25.  MacMurray,  1918/8,  Declaration  attached  to  Treaty  of 
June  13,  1918.  It  is  to  be  noticed  that  the  grant  of  most  favored 
nation  treatment  is  limited  to  the  time  until  a  treaty  of  establish- 
ment and  commerce  is  made. 

25 A.  Hertslet,  Vol.  1,  Xo.  73,  p.  426,  Art.  10,  Treaty  of  Dec.  1, 
1887. 

26.  Hertslet,  Vol.  1,  No.  20,  pp.  108-109,  Arts.  9  and  18,  Treaty 
of   March  1,  1894,  relative  to  Burma  and  China. 

27.  Arts.  6  and  7,  Treaty  of  April  25,  1886,  Hertslet,  Vol.  1, 
Xo.  47,  p.  303  et  seq. ;  Art.  7,  Treaty  of  June  26,  1887,  Hertslet, 
Vol.  1,  Xo.  48,  p.  313;  modified  bv  Art.  4,  Treaty  of  June  20, 
1895,  Hertslet,  Vol.  1,  Xo.  53,  p.  325. 

28.  Hertslet,  Vol.  1,  No.  85,  p.  492  et  seq.,  Russian  land  trade 
regulations  annexed  to  Treatv  of  Feb.  24,  1881. 

29.  Hertslet,  Vol.  1,  No.  67,  p.  396,  Art.  11,  Treaty  of  D» 
1905. 

30.  Hertslet,  Vol.  1,  Xo.  60,  pp.  357,  360,  Arts.  24  and  54. 

31.  Hertslet,   Vol.   1,   X...  n,  p.  34. 

32.  Hertslet,  Vol.  1,  Xo.  11,  p.  62 

33.  Hertslet,  Vol  1.  No.  20,  i>.  108,  Art.  22. 

34.  State  Papers,  VoL  32,  i».  7"1  ;  also  see  Hertslet  Vol.  1, 
No.  ''4,  pp.  545.  551  552. 

'■it   6,  i  lerl  l(  i.  Vol.  1.  No.  96,  p  i   \it.  :■>.  Treaty 

of  Nov.  17,  1880,  Hertslet,  Vol.  1.  No  98,  pp.  561  ^"2\  also  Art   5 
s.  1903,  Hertslet,  VoL  1.  X...  100,  p.  571 
36.   Vol.  1,  No.  62,  i..  365. 


370        [MPAIRMENTS  OF  SOVEREIGNTY 

37.  Hertslet  Vol  1.  No.  64,  pp.  376,  381. 

38.  Hertslet,  Vol.  1.  No.  66,  pp.  386-387.  Art.  9. 

o.  56,  p.  339,  Art  40,  Treaty  of  Sept  2, 
1861;  also  Art.  IS,  i>.  335. 

40.  Hertslet  Vol  I,  No.  57,  p.  343,  Art.  1. 

41.  I.  U.  Moore,  International  La*  Digest  Vol  5,  pp.  270-271, 
Earl  Granville,  Sec  of  State  for  For.  AtTairs,  to  Mr.  West, 
British  Minister,  Feb.  12,  1885.  Blue  Book  Commercial  No.  4, 
1885,  pp.  21-22. 

42.  Ibid.,  Vol.  5,  p.  273.  Mr.  Bavard,  Sec.  of  State,  to  Mr. 
Hubbard,  lulv  17.  1886.  MS.  Inst  [apan  111.  p.  425;  cf.  Whitney 
vs.  Robertson,  1888,  124  U.  S.  190. 

43.  Ibid.,  Vol.  5,  p.  27*.  Mr.  Sherman,  Sec.  of  State,  to  Mr. 
Buchanan,  Minister  to  Argentine  Republic,  Jan.  11,  1898. 

44.  122  U.   S.  116. 

45.  8  American  Journal  of  International  Law,  editorial  com- 
ment, 1914,  p.  578;  Tyau,  Treaty  Obligations  between  China  and 
Other  States,  p.  198. 

46.  Moore,  op.  cit.,  Vol.  5,  p.  272,  Mr.  Bavard,  Sec.  of  State, 
to  Mr.  Miller.  June  15,  18S6,  160  MS.  Dom.  Let.  481. 

47.  U.  S.  For.  Rel.,  1896,  p.  429  et  seq.,  Mr.  Olney,  Sec.  of 
State,  to  Mr.  Dun,  Minister  to  Japan,  Nov.  12.  1896;  Moore,  op. 
cit,  VoL  5,  p.  316. 

48.  Ibid.,  Vol.  5,  p.  290,  the  note  of  German  Minister  to  the 
United  States  State  Department,  dated  Feb.  16,  1886,  quoted  in 
Mr.  Bayard's  report,  Sec.  of  State  to  the  President  January  14, 
1889,  H.  Ex.  Doc.  74,  50th  Congress,  Second  Session. 

49.  Moore,  op.  cit..  Vol.  5,  p.  289,  the  opinion  of  Attorney 
General,  Sept.  19,  1885,  quoted  in  report  of  Mr.  Bavard,  Sec.  of 
State,  to  the  President.  Jan.  14.  1889,  H.  Ex.  Doc.  74,  50th 
Congress,  Second  Session. 

50.  U.  S.  bur.  Rel.,  1894,  App.  I.  pp.  472.  473,  Mr.  Blaine, 
Sec.  of  State,  to  Mr.  Hertado,  Columbian  Minister,  May  31, 
1892;  Moore,  op.  cit.,  Vol.  5,  p.  304. 

51.  Moore,  op.  cit..  Vol.  5,  p.  307. 

52.  Ibid..  Vol.  5.  pp.  308-309. 

53.  Hertslet,  Vol.  1,  No.  36,  p.  240. 

54.  Tyau,  op.  cit.,  p.  198. 

55.  Millard's  Review.  Supplement,  July  17.  1920,  pp.  4-5,  Mil- 
lard, China's  Case  at  the  Peace  Conference. 

56.  S.  K.  Hornbeck,  the  mosl  favored  nation  clause,  \merican 
Journal  of  Internationa]  Law.  VoL  3,  1909,  p.  405;  also  sec  his 
three  articles,  pp.  396,  619,  79 


XXIII 
TARIFF  AUTONOMY 

We  now  come  to  another  form  of  the  impairment  of 
China's  sovereignty,  and  that  is,  servitude  with  respect 
to  tariff  autonomy.  It  is  a  principle  in  international  law 
that  every  state  with  full  sovereignty  has  the  right  to 
regulate  its  own  tariff  by  legislation  or  otherwise,  but 
in  China,  this  prerogative  of  sovereignty  is  denied  by 
the  foreign  Powers.  In  fact,  tariff  autonomy  has  become 
so  much  impaired  that,  either  by  virtue  of  express  state 
treaty  provisions  or  through  the  operation  of  the  most 
favored  nation  clause,  China  can  not  regulate  or  change 
her  tariff,  made  in  convention  with  the  foreign  Powers, 
without  first  securing  the  unanimous  consent  of  the  Pow- 
ers concerned.  And  experience  has  demonstrated  that 
the  securing  of  such  a  unanimous  vote  is  extremely  diffi- 
cult, if  not  well-nigh  impossible. 

The  origin  of  Chinese  servitude  in  tariff  autonomy 
dates  back  to  the  Treaty  of  Nanking,  August  29,  1842. 
Article  X  of  the  treaty  stipulated: 

"lli>  Majesty  the  Emperor  of  China  to  estab- 

lish at  all  the  ports  which  are,  by  Article  11  of  this  treaty. 
to  be  thrown  open  for  the  resort  of  British  merchants, 
a  fair  and  regular  tariff  of  exporl  and  import  customs 
and  other  dues,  which  tariff  shall  be  publicly  notified 
and  promulgated  for  general  information.  And  the  Em- 
peror  further  engages,   that   when   British  merchandise 

shall   have  once   paid  at   any  of   the   Said  ports   the   I 

lated  customs  and  dues,  agreeable  to  the  tariff  to  be 
iter  fixed,  such  merchandise  may  be  conveyed  by 
Chinese  merchant  province  or  city  in  the  inte- 

rior of  the  Empire  of  c  hma,  on  paying  a  further  amount 

371 


372       IMPAIRMENTS  OF  SOVEREIGNTY 

as  transit  duties,  which  shall  not  exceed per  cent 

on  the  taritT  value  of  such  goods."1 

In  accord  with  this,  in  the  supplementary  Treaty  of  Oc- 
tober 8,  1843,  the  tariff  of  import  and  export  duties 
was  agreed  upon,  averaging  five  per  cent  ad  valorem 
except  in  some  instances  when  the  rate  went  up  as  high 
as  ten   per  cent.2 

In  the  subsequent  American  Treaty  of  July  3,  1844,8 
and  the  French  Treaty  of  October  24,  1844,4  there  was 
attached  in  each  case  a  tariff  of  duties.  In  the  American 
Treaty,  it  was  specifically  stated  that  the  consent  of  the 
United  States  was  required  for  any  modification  in  the 
tariff  list: 

"Citizens  of  the  United  States  resorting  to  China  for 
the  purposes  of  commerce  will  pay  the  duties  of  import 
and  export  prescribed  in  the  tariff,  which  is  fixed  by 
and  made  a  part  of  this  treaty.  ...  If  the  Chinese  Gov- 
ernment desires  to  modify  in  any  respect  the  said  tariff, 
such  modifications  shall  be  made  only  in  consultation 
with  consuls  or  other  functionaries  thereto  duly  author- 
ized in  behalf  of  the  United  States,  and  witli  the  consent 
thereof  .  .  ."   (Art.  2).6 

In  1858,  when  Great  Britain  and  France  had  defeated 
China  in  the  so-called  Arrow  War  (the  Second  War  with 
Great  Britain),  the  British  Treaty  of  Tientsin,  June  26, 
1858,  provided  for  a  revision  of  the  tariff  6  which  was 
to  endure  for  a  period  of  ten  years,  subject  to  a  demand 
for  revision  by  either  party  at  the  end  of  the  term,7  and 
for  the  fixation  of  the  transit  duties  at  the  rate  of  two 
and  a  half  per  cent  ad  valorem.8  In  pursuance  of  the 
above  provision  for  tariff  revision,  a  subsequent  agree- 
ment was  made  on  November  8,  1858,°  containing  rules 
of  trade  and  a  tariff  list.10  In  general,  a  1'ixq  per  cent 
ad  valorem  duty  both  on  imports  as  well  as  on  exports 
v. a-  provided  "Articles  not  enumerated  in  either  list 
(export  and  import),  nor  in  the  list  of  duty-free  goods, 


TARIFF  AUTONOMY  373 

will  pay  an  ad  valorem  duty  of  five  per  cent,  calculated 
on  the  market  value"  (Rule  1).  The  transit  duties  were 
again  fixed  at  one-half  of  the  tariff  duties  (Rule  7).  A 
uniform  system  of  taxation  was  provided:  "It  is  agreed 
that  one  uniform  system  shall  be  enforced  at  every  port" 
(Rule  10).  A  duty-free  list  was  stipulated  consisting 
of  gold  and  silver  bullion,  foreign  coins,  flour,  and  the 
daily  necessities  of  foreign  residents  in  China  (Rule  2). 
Contraband  goods  comprised  gunpowder,  ammunition 
and  other  implements  of  war  and  salt  (Rule  3).11  Simi- 
larly with  the  French  Treaty  of  June  27,  1858,12  a  new 
tariff  list  and  commercial  regulations  were  attached.13 
The  United  States  drew  up  a  separate  convention  at 
Shanghai,  November  8,  1858,M  with  a  new  tariff  and 
regulations  of  trade  and  transit.  Russia  simply  stipu- 
lated that  her  merchants  should  pay  the  same  duties  as 
were  levied  on  other  foreign  merchants.1' 

Since  1858,  despite  the  provision  for  periodic  revision 
of  tariff  at  the  end  of  ten  years,  for  one  reason  or  an- 
other the  privilege  has  not  been  availed  of  but  on  two 
occasions, — in  1902  and  1918.  In  the  final  protocol  for 
the  settlement  of  the  Boxer  Trouble,  September  7,  1901, 19 
the  Maritime  Customs,  the  Native  Customs,  and  the  Salt 
Gabelle,  were  made  the  securities  of  the  Boxer  indem- 
nity amounting  to  450,000,000  Ilaikuan  taels  to  be  paid 
off  in  annual  installments  until  1940  (Art.  6),  and  the 
import  tariff  was  to  be  raised  to  an  effective  five  per 
cent  ad  valorem,  and  the  ad  valorem  duties,  as  far  as 
feasible,  were  to  be  converted  into  specific  duties,  cal- 
culated on  the  average  value  of  merchandise  at  the  time 
of  landing  during  the  three  years,  1897-1899  (Art.  6). 
In  pursuance  of  these  provisions,  the  Agreement  of 
Shanghai,  August  29,  1902,  was  made,  signed  by  the 
special  commissioners  of  Austria  Hungary,  Belgium, 
Germany,  Great  Britain,  Japan,  Netherlands,  Spain,  and 
later  by  those  of  the  I  Inited  States,  France,  and  Sweden 
and  Norway,  and  providing  for  a  new  tariff  list.17    The 


374        IMPAIRMENTS  OF  SOVEREIGNTY 

values  of  the  goods  were  revised,  bill  the  uniform  rate 
of  five  per  cent  ad  valorem  remained  unmodified. 
Meanwhile,  in  the  Mackay  Treaty  of  September  5, 

1902,  the  abolition  of  likin  was  provided,  and  as  a  com- 
pensation, import  duties  were  to  be  raised  to  not  more 
than  twelve  and  one-half  per  cent  and  export  duties  to 
not  more  than  seven  and  one-half  per  cent.  The  Pream- 
ble of  Article  VIII  of  that  treaty  reads:18 

"The  Chinese  Government  recognizing  that  a  system 
of  levying  Likin  (Inland  Transit  Tax)  and  other  duties 
on  goods  at  the  place  of  production,  in  transit,  and  at 
destination,  impedes  the  free  circulation  of  commodities 
and  injures  the  interests  of  trade,  hereby  undertake  to 
discard  completely  these  means  of  raising  revenue  with 
the  limitation  mentioned  in  Section  8. 

"The  British  Government,  in  return,  consent  to  allow 
a  surtax  in  excess  of  the  tariff  rates  for  the  time  being 
in  force  to  be  imposed  on  foreign  goods  imported  by 
British  subjects  and  a  surtax  in  addition  to  the  export 
duty  on  Chinese  produce  destined  for  export  abroad  or 
coastwise. 

"It  is  clearly  understood  that,  after  Likin  barriers 
and  other  stations  for  taxing  goods  in  transit  have  been 
removed,  no  attempt  shall  be  made  to  revive  them  in 
any  form  or  under  any  pretext  whatever ;  that  in  no 
case  shall  the  surtax  on  foreign  imports  exceed  the 
equivalent  of  one  and  a  half  times  the  import  duties 
leviable  in  terms  of  the  Final  Protocol  signed  by  China 
and  the  Powers  on  the  7th  day  of  September,  1901  ;  that 
payment  of  the  import  duty  and  surtax  shall  secure  for 
foreign  imports,  whether  in  the  hands  of  Chinese  or 
non-Chinese  subjects,  in  original  packages  or  otherwise, 
complete  immunity  from  all  Other  taxation,  examination 
or  delay;  that  the  total  amount  of  taxation  leviable  on 
native  produce  by  export  abroad  shall,  under  no  circum- 
stances, exceed  seven  and  one-half  per  cent  ad  valorem." 

This  consent,  however,  for  an  increase  of  the  import 
tariff  to  twelve  and  one-half  per  cent  and  of  export  duty 


TARIFF  AUTONOMY  375 

to  seven  and  one-half  per  cent  in  recompense  for  the  abo- 
lition of  likin  was  made  under  the  following  conditions: 

"1.  That  all  Powers  who  are  now  or  who  may  here- 
after become  entitled  to  most  favored  nation  treatment  in 
China  enter  into  the  same  engagements. 

"2.  And  that  their  assent  is  neither  directly  or  indi- 
rectly made  dependent  on  the  granting  by  China  of  any 
political  concession  or  of  any  exclusive  commercial  con- 
cession. 

"3.  Should  the  Powers  entitled  to  most  favored  na- 
treatment  have  failed  to  agree  to  enter  into  the 
jements  undertaken  by  Great  Britain  under  this 
Article  by  the  1st  January,  1904,  then  the  provisions  of 
the  Articles  shall  only  come  into  force  when  all  the 
Powers  have  signed  their  acceptance  of  these  engage- 
ments." 19 

Similar  consent  was  also  granted  in  the  American  Treaty 
of  October  8,  1903,-°  and  in  the  Japanese  treaty  of  the 
same  date.21  Inasmuch,  however,  as  the  unanimous  con- 
sent is  required  of  the  Powers  that  are  enjoying  or 
may  enjoy  the  most  favored  nation  treatment,  as  stipu- 
lated  in  the  British  conditions,  the  provisions  have  so  far 
been  non-effective. 

The  last  revision  of  the  tariff  took  place  in  1018.  It 
was  in  connection  with  China's  entrance  into  the  World 
War  in  I'M 7  that  the  Allied  Powers  again  consented  to 
a  revision,  but  this  only  to  bring  the  tariff  to  an  effective 
the  per  cent.--  They  assented  to  "the  principle  of  in- 
crease of  the  Maritime  Customs  duties  to  an  effective 
rate  of  five  per  cent  ad  valorem,  a  commission  including 
Chinese  delegates  to  be  intrusted  with  the  modifications 
to  be  adopted  in  the  system  of  customs  tariffs  in  the 
interests  of  all  the  contracting  parties,  and  the  Allied 
Governments  lending  the  Chinese  Government  their  good 
offices  in  order  to  obtain   tin-  acceptance  by  the   neutral 


376       IMPAIRMENTS  OF  SOVEREIGNTY 

is  of  this  increase  in  the  Maritime  Customs  duties," 
at  the  same  time  demanding  the  promulgation  by  the 
Chinese  Government  of  a  general  tariff  for  all  countries 
without  treaties.  In  pursuance  of  this  consent,  a  tariff 
revision  commission  met  in  Shanghai  in  January,  1918. 
The  hasis  of  revision  was  to  be  "the  average  of  the  values 
of  imports  as  they  appeared  upon  invoices  during  the 
years  1912-1916."  -3  The  rates  thus  fixed,  which  became 
effective  in  August,  1919,  are  to  last  for  at  least  two  years 
after  the  end  of  the  war,  at  which  time  another  revision 
may  be  made.  Estimated  in  accordance  with  the  pre- 
vailing price  of  1918,  the  new  tariff  now  in  force  amounts 
only  to  about  four  per  cent  effective.24 

Adverting  to  the  foreign  administration  of  the  Chinese 
Maritime  Customs,  the  beginning  of  such  supervision 
dated  back  to  the  time  of  the  Taiping  Rebellion,  when, 
in  September,  1853,  the  Chinese  city  of  Shanghai  was 
captured  by  the  Taiping  rebels.  In  consequence,  the 
Chinese  customs  was  closed  and  foreign  merchants  had  no 
officials  to  receive  customs  duties.  In  order  to  meet  the 
emergency  the  foreign  consuls  collected  the  duties  for 
a  while,  but  this  soon  proved  to  be  quite  irksome.  On 
June  29,  1854,  therefore,  the  following  agreement  was 
entered  into  by  the  Shanghai  Taotai  and  the  British, 
American  and  French  consuls  for  the  establishment  of 
a  foreign  board  of  inspectors : 

"Rule  1.  The  chief  difficulty  experienced  by  the  super- 
intendent of  customs  having  consisted  in  the  impossi- 
bility of  obtaining  Customs  House  officials  with  the 
necessary  qualifications  as  to  probity,  vigilance,  and 
knowledge  of  foreign  languages,  required  for  the  en- 
forcement of  a  close  observance  of  treaty  and  customs 
house  regulations,  the  only  adequate  remedy  appears  to 
be  in  the  introduction  of  a  foreign  element  into  the 
customs  house  establishment,  in  the  persons  of  foreigners 
carefully  selected  and  appointed  by  the  tautai,  who  shall 


TARIFF  AUTONOMY  377 

apply  the  deficiency  complained  of,  and  give  him  efficient 
and  trustworthy  instruments  wherewith  to  work."-lA 

Under  this  agreement  a  board  of  three  foreign  in- 
spectors was  appointed,  of  which  Captain  Sir  Thomas  F. 
Wade  was  the  chief  executive  officer.  On  his  resigna- 
tion a  year  later,  Mr.  Horatio  Nelson  Lay  was  appointed. 
This  continued  until  1858,  when  the  tarilT  commission 
met  and  agreed  to  rules  of  trade  of  which  the  tenth 
stipulated  for  the  appointment  of  a  British  subject  as 
Inspector-General  to  assist  the  High  Commissioner  ap- 
pointed by  the  Chinese  Government : 20 

"The  high  officer  appointed  by  the  Chinese  Govern- 
ment to  superintend  foreign  trade  will  accordingly,  from 
time  to  time,  either  himself  visit,  or  will  send  a  deputy 
to  visit,  the  different  ports.  The  said  high  officer  will 
be  at  liberty,  at  his  own  choice,  and  independently  of 
the  suggestion  or  nomination  of  any  British  authority, 
to  select  any  British  subject  he  may  see  fit  to  aid  him 
in  the  administration  of  the  customs  revenue ;  in  the 
prevention  of  smuggling;  in  the  definition  of  port  boun- 
daries; or  in  discharging  the  duties  of  harbor-master; 
also  in  the  distribution  of  lights,  buoys,  beacons  and  the 
like,  the  maintenance  of  which  shall  be  provided  for  out 
of  the  tonnage  dues." 

Under  this  provision  Mr.  H.  N.  Lay  was  appointed 
Inspector-General  in  1859,  but  he  soon  fell  into  dis- 
agreement with  the  Chinese  Government  over  the  pur- 
chase of  a  fleet  of  gunboats  for  the  suppression  of  pii 
because  of  which  he  was  permitted  to  resign  in  1863.  The 
successor  of  Mr.  Lav  was  Mr.  Robert  Hart,  who  was 
knighted  in  1882  for  his  distinguished  in  the  or- 

ganization and  administration  of  the  Chinese  Maritime 
Customs.    He  held  the  office  until  1906,  when  he  wa 
ceeded  by  Mr.  F.  A   Aglen.    Thus,  abiding  by  the  p 
of   1898 -"  that  a  British  subject   should  1"-  appointed 
Inspector-General  while  British  trade  predominates,  the 


378        IMPAIRMENTS  OF  SOVEREIGNTY 

Chinese    Government    has    successively    appointed    the 
British  to  that  important  post. 

Turning  to  the  tariff  system  and  its  administration,  the 
rate  of  duty  on  imports,  we  find,  is  five  per  cent  ad 
valorem  calculated  on  the  average  of  the  prevailing  prices 
of  1912-1916,  inclusive.  The  rate  of  duty  on  exports 
still  remains  five  per  cent  ad  valorem  as  fixed  in  the 
treaties  of  1858.  A  drawback  of  the  duty  paid  can  be 
obtained  if  the  imported  goods  are  reexported  within 
three  years,  either  to  another  open  port  or  to  a  foreign 
port.-7  Goods  shipped  from  one  open  port  to  another 
are  to  pay  five  per  cent  on  departure  and  two  and  a  half 
per  cent  on  arrival.28  The  frontier  trade  with  Russia, 
Korea,  Annam  and  Burma  obtains  a  reduction  usually 
of  one-third  of  the  usual  rate  at  the  treaty  port.  The 
foreigner  further  is  permitted  the  option  of  paying  the 
transit  dues  in  the  inland  trade  through  tolls  at  the 
different  stations  or  by  a  single  payment  at  the  rate  of 
half  of  the  tariff  duties,  or  two  and  a  half  per  cent, 
which  will  exempt  his  goods  from  all  further  exactions  in 
transit.28A 

There  are  four  kinds  of  customs  in  China.  The  first 
is  the  Maritime  Customs  located  at  the  treaty  ports  and 
under  foreign  supervision.  The  second  is  the  frontier 
customs  located  at  the  boundaries  between  China  and 
Russia,  Korea,  Annam  and  Burma,  which  are  also  under 
foreign  supervision.  The  third  is  the  customs  in  the 
leased  territories,  situated  usually  at  the  frontier  between 
the  borders  of  the  leased  territories  and  China.  They  are 
likewise  under  the  control  of  the  Inspector-General  of 
Maritime  Customs,  although  the  commissioners  in  charge 
are  usually  of  the  nationality  to  whom  the  leased  ter- 
ritory pertains.  The  fourth  kind  is  the  native  customs 
for  the  collection  of  inland  duties.  They  are  generally 
under  the  control  of  the  Central  Government  at  Peking, 
except  those  located  within  fifty  li  radius  of  the  treaty 


TARIFF  AUTONOMY  379 

ports  which  have  been  annexed  since  1901  to  the  Mari- 
time Customs.29 

The  Maritime  Customs,  despite  foreign  supervision, 
remains,  nevertheless,  a  branch  of  the  Chinese  Govern- 
ment. While  an  autocrat  in  his  administration,  to  whom 
the  Chinese  Government  does  not  dictate  nor  interfere  in 
appointments  or  administration,  the  Inspector-General 
is  yet  under  the  authority  of  the  Chinese  Government,  and 
administers  the  service  in  conformity  with  the  wishes 
and  commands  of  the  Peking  Government.  The  customs 
receipts,  while  accounted  for  by  foreign  customs  com- 
missioners, do  not  pass  through  their  hands,  but  are  paid 
by  the  importer  and  the  exporter  to  the  bank  or  deposi- 
tory designated  by  the  Chinese  Government.  The  re- 
ceipts, however,  cannot  be  drawn  upon  by  the  Chinese 
Government  until  the  obligations  of  the  foreign  debts 
for  which  the  customs  revenue  has  been  pledged  as 
security  have  been  discharged. 

We  now  come  to  the  disadvantages  of  the  tariff  sys- 
tem in  China.  In  the  first  place,  the  tariff  as  fixed  lacks 
the  element  of  reciprocity.  That  is  to  say,  it  is  a  one- 
sided or  unilateral  tariff,  imposing  restrictions  on  China, 
but  offering  no  concession  or  compensation  in  return. 
Thus,  foreign  importers  pay  only  five  per  cent  ad  valorem, 
but  Chinese  importers  have  to  pay  whatever  foreign 
states  levy. 

In  the  second  place,  the  tariff  as  now  fixed  at  a 
uniform  rate  of  five  per  cent  ad  valorem  18  unscientific. 
It  docs  not  differentiate  raw  materials  and  manufactured 
goods,  taxing  all  alike  at  five  per  cent  ad  valorem,  which 
practice  has  long  been  discarded  by  modern  states  adopt- 
ing a  scientific  tariff.     Further,  it   fails  to  distinguish 

luxuries  from  necessities,  levying  the  same  uniform  duty 
of  five  per  cent  on  both,  which  distinction  all  scientific 
tariffs  make.  The  glaring  COntraSl  between  I  'hinese  tariff 
duties  and  those  of  the  (  ircat   Powers  can  be  seen  in  the 


380       IMPAIRMENTS  OF  SOVEREIGNTY 

following  table  of  the  tariff  duties  on  tobacco  and  liquor 
vied  in  1913  :30 


Tobacco                                 Spirits 

L.     s.     d.                                  L.      s.      d. 

AND 

i  i)  States 

Fb  \Ni  1". 

Japan 

C  HIN  A 

8    6    per  lh.                           15      2   per  gal 

18    9      "      "   and  25%           10     10     "      " 

1       7    2y2"     "                             2      6V2"     " 

355%                                                 10      2     "     " 

5%                                               4/,%         "     " 

On  the  other  hand,  articles  which  should  be  imported 
free  of  duty,  such  as  the  necessities  of  life,  pay  the  same 
uniform  rate  of  five  per  cent  ad  valorem.  The  disparity 
is  indicated  in  the  following  table  of  the  percentage  of 
value  of  articles  imported  free  of  duty  into  China  and 
the  other  countries  in  1913: 31 

China 6.5% 

Japan   49.5% 

Fi  \\>-i: 50.0% 

United  States 54.5% 

England    907% 

In  the  third  place,  duties  are  rigid  and  inflexible.  The 
rate  cannot  increase  nor  decrease  as  the  needs  of  revenue 
require.  It  is  constantly  out  of  adjustment  with  rising 
prices.  Its  rates  for  imports  are  estimated  on  the  basis 
of  the  average  price  of  1912  to  1916,  inclusive,  that  is, 
five  years  ago,  and  except  for  a  revision  in  the  imme- 
diate future,  in  the  face  of  the  rising  tide  of  price  levels, 
they  will  soon  be  out  of  adjustment  with  market  prices. 
The  rates  for  export  are  still  based  on  those  fixed  by 
the  treaties  of  1858,  which  were  concluded  more  than  half 
a  century  ago. 

In  the  fourth  place,  the  operation  of  the  present  tariff 
system  results  in  a  shortage  of  revenue.  Based  on  the 
average  of  the  prevailing  prices  of  1897-8-9  until  1919, 
and  since  then,  on  that  of  the  prevailing  prices  of  1912- 


TARIFF  AUTONOMY  381 

1916,  inclusive,  the  revenues  collected,  in  view  of  advanc- 
ing prices,  are  wholly  incommensurate  with  the  fiscal 
needs  of  the  Government.  The  uniform  rate  of  five  per 
cent  ad  valorem  being  so  low  and  unchangeable,  it  is  no 
wonder  that  customs  receipts  should  constitute  a  rela- 
tively small  percentage  of  the  total  income  of  the  Chinese 
Government. 

What  is  worse,  out  of  the  shortage  of  revenue,  there 
arises  another  great  evil,  and  that  is  the  likin  or  the  inland 
transit  dues.  Because  of  the  dire  needs  of  the  Govern- 
ment, this  cannot  be  abolished  without  a  compensating 
increase  in  tariff  which,  as  we  have  seen,  cannot  be  ob- 
tained without  the  unanimous  consent  of  all  the  Treaty 
Powers  enjoying,  or  that  may  enjoy,  the  most  favored 
nation  treatment.  In  view  of  the  privilege  of  commuta- 
tion granted  to  foreign  traders  who  are  required  to  pay 
only  two  and  a  half  per  cent  at  the  Maritime  Customs, 
Chinese  merchants  denied  this  privilege  have  to  pay  all 
the  tolls  collected  at  the  successive  likin  stations  varying 
from  ten  per  cent  within  the  province  to  some  twenty 
per  cent  for  transit  through  several  provinces.  Thus  in 
commercial  competition  foreign  merchants  are  favored 
through  the  likin  reduction,  equivalent  to  the  difference 
between  the  two  and  a  half  per  cent  paid  by  the  foreign 
merchants  and  the  ten  to  twenty  per  cent,  or  more,  paid 
by  the  Chinese.  Thus,  the  likin  system  tends  to  destroy 
the  Chinese  inland  trade  and  to  deter  the  growth  of 
Chinese  industry,  while  it  favors  foreign  commerce.32 

In  the  fifth  place,  the  present  tariff  system  deprives 
China  of  one  of  her  most  important  attributes  of  sov- 
ereignty, the  right  of  taxation,  or,  to  be  more  accurate, 
the  right  to  regulate  her  own  tariff.  As  it  is,  China  is 
crippled  to  such  an  extent  that  she  cannot  alter  her  tariff 
without  the  consent  (if  the  Powers,-  nay,  what  is  worse, 
their  unanimous  consent.     '11  .  in  so  far  as  the 

control  of  the  tariff  is  in  the  hands  of  t:  a  Powers, 

to  that  extent  is  China's  sovereignty  impai 


382       IMPAIRMENTS  OF  SOVEREIGNTY 

In  view  of  these  serious  disadvantages,  the  Chinese 
Government  is  determined  to  recover  tariff  autonomy  at 
the  earliest  moment  possible.  In  1906  she  established  the 
Shui-wu-chu,  or  Board  of  Revenues,  to  supervise  and 
centralize  the  administration  of  the  revenue  departments 
of  the  Government,  including  the  Maritime  Customs, 
which  step,  however,  did  not  do  away  with  the  foreign 
supervision  of  the  Chinese  Marlime  Customs.  In  1908, 
a  Customs  Training  College  was  established  at  Peking 
to  prepare  students  for  customs  service  when  her  con- 
trol of  the  customs  should  be  recovered.  Besides  these 
preparatory  measures,  at  the  Paris  Peace  Conference, 
the  Chinese  Government,  through  its  Delegation,  an- 
nounced its  claim  for  the  restoration  of  her  tariff 
autonomy. 

"To  conform  to  the  aim  and  object  of  the  League 
of  Nations  it  is  urgently  desired  that  the  right  of  China 
to  revise  the  existing  tariff  conventions  should  be  recog- 
nized and  agreed  to  by  the  friendly  Powers. 

"The  prolonged  unfavorable  balance  of  trade  and  the 
constant  increase  of  national  debt  have  created  a  serious 
financial  and  economic  stress  which  can  only  be  relieved 
by  consolidating  the  system  of  taxation  and  encouraging 
the  export  trade,  which  will  in  turn  benefit  the  importers 
by  increasing  the  people's  purchasing  power.  This  reform 
has  long  been  overdue,  and  in  placing  China's  case  before 
the  Peace  Conference  the  Chinese  Government  have  be- 
hind them  the  voice  of  the  whole  country.  It  is  to  be 
hoped  that  the  friendly  Powers  will  restore  to  China 
the  same  fiscal  right  as  is  enjoyed  by  all  independent 
nations  so  that  the  Chinese  people  may  develop  their 
natural  resources,  become  better  customers  of  the  world's 
commodities,  and  contribute  their  share  to  the  progress 
and  civilization  of  mankind."  :,i 

As  a  practical  measure,  the  Chinese  Government  pro- 
posed to  supersede  the  conventional  tariff  two  years  there- 


TARIFF  AUTONOMY  383 

after  by  the  general  tarilT  now  applicable  to  the  non- 
treaty  Powers,  that  is,  by  1921.  Prior,  however,  to  the 
complete  restoration,  it  proposed  to  enter  into  negotiation 
with  the  Powers  with  a  view  to  arranging  a  new  conven- 
tional tariff  on  the  articles  in  which  they  are  especially 
interested,  and,  under  these  conditions : 

"1.     Any  favorable  treatment  must  be  reciprocal. 

"2.  A  differential  scale  must  be  established  so  that 
luxuries  should  pay  more  and  raw  materials  less  than 
necessaries. 

"3.  The  basis  of  the  new  conventional  rate  for  neces- 
saries must  not  be  less  than  twelve  and  a  half  per  cent 
in  order  to  cover  the  loss  of  revenue  resulting  from  the 
abolition  of  likin  as  provided  for  in  the  commercial 
treaties  of   1902-1903. 

"4.  At  the  end  of  a  definite  period  to  be  fixed  by  new 
treaties,  China  must  be  at  liberty  not  only  to  revise  the 
basis  of  valuation,  but  also  the  duty  rate  itself. 

"In  return  for  such  concessions  China  is  willing  to 
abolish  the  undesirable  tax  of  likin  so  that  anything  that 
tends  to  hinder  the  development  of  trade  may  be  removed 
once  for  all."  34 

Notwithstanding  the  failure  of  her  claim,  China  recov- 
ered her  tariff  autonomy  from  Germany  and  Austria- 
Hungary.  Article  128  of  the  Treaty  of  Peace  with  Ger- 
many reads :  "Germany  renounces  in  favor  of  China  all 
benefits  and  privileges  resulting  from  the  provisions  of 
the  final  Protocol  signed  at  Peking  on  September  7,  1901, 
and  from  all  annexes,  notes  and  documents  supplementary 
thereto."  This  includes  the  relinquishment  of  German 
rights  in  Chinese  tariffs.  Article  129  further  Stipulal 
"China,  however,  will  no  longer  be  bound  to  grant  to 
Germany  the  advantages  or  privileges  which  she  allowed 
Germany  under  these  arrangements."    This  i  the 

arrangement  of  August  29,  1902,  regarding  the  new 
Chinese  Customs  Tariff,  thus  specifically  eliminating  tier- 
many   from   the   list  of  the   privileged   nations   in   the 


384       IMPAIRMENTS  OF  SOVEREIGNTY 

Chinese  tariff  agreement.     Similarly,  she  recovered  her 
tariff  autonomy  from  Austria  and  Hungary.88 


NOTES  TO  CHAPTER  XXIII 

1.  Hertslct's  China  Treaties,  Vol.  1,  No.  1.  p.  10. 

2.  State  Papers,  Vol.  31,  pp.  132,  141  et  seq. 

3.  State  Papers,  Vol.  32,  p.  791  et  seq. 

4.  Hcrtslct,  Vol  1,  No.  39,  p.  258  et  seq. 

5.  State  Papers,  Vol.  32,  pp.  791-792. 

6.  Hertslet,  Vol.  1,  No.  6,  pp.  26-27,  Art.  26. 

7.  Ibid.,  Art.  27. 

8.  Ibid,  Art.  28. 

9.  Hertslet,  Vol.  1,  No.  7,  p.  35  et  seq. 

10.  Hertslet,  Vol.  1,  No.  7,  p.  41  et  seq. 

11.  Hertslet,  Vol.  I,  No.  7,  pp.  36-40,  41  et  seq. 

12.  Hertslet,  Vol.  1,  No.  40,  pp.  269-286. 

13.  Hertslet,  VoL  1,  No.  41,  p.  286,  Nov.  24,  1858;  State 
Papers,  Vol.  51,  pp.  654,  662. 

14.  Hertslet,  VoL  1,  No.  95,  pp.  552-553. 

15.  Hertslet,  Vol.  1,  No.  81,  p.  457,  Art.  4,  Treaty  of  June  13, 
1858. 

16.  Hertslet,  Vol.  1,  No.  26,  p.  123  et  seq. 

17.  Hertslet,  Vol.  1,  No.  27,  p.  148  et  seq. 

18.  Hertslet,  Vol.  1,  No.  28,  p.  174. 

19.  Hertslet,  Vol.  1,  No.  28,  p.  180. 

20.  Hertslet,  Vol.  1,  No.  100,  pp.  566,  568.  Art.  4. 

21.  Hertslet,  Vol.  1,  No.  66,  p.  384,  Art.  1. 

22.  MacMurrav,  1917/7. 

23.  China  Year  Book,  1919,  p.  422. 

24.  \V.  W.  Willoughby,  Foreign  Rights  and  Interests  in  China, 
p.  119. 

24A.    Morse,  The  Trade  and  Administration  of  China,  p.  367. 

25.  Hertslet,  Vol.  1,  No.  7,  pp.  39-40. 

26.  MacMurray,  1898/2. 

27.  Hertslet,  Vol.  1,  No.  6,  p.  32,  Art.  45,  Treaty  of  June  26, 
1858;  also  No.  12,  p.  79,  Chefoo  Agreement,  Sept.  13,  1876,  Sec. 
3,  Clause  5;  No.  28,  p.  171,  Art.  1,  Treaty  of  Sept.  5,  1902. 

28.  Hertslet,  Vol.  2,  No.  124,  p.  634,  Sec.  3,  Art.  1. 

28A.  Hertslet,  Vol.  1,  No.  6,  pp.  27-28,  Art.  28,  Treaty  of 
June  26,  1858;  No.  7,  p.  38,  Rule  7,  Agreement  of  Nov.  8,  1858; 
No.  28,  p.  174  et  seq.,  Art.  8,  Treaty  of  Sept.  5,  1902. 

29.  Hertslet,  Vol.  1,  No.  26,  p.  128,  Art.  6,  Final  Protocol  of 
Sept.  7,  1901. 

30.  The  Shantung  Question,  presented  by  China  to  the  Paris 
Peace  Conference,  published  by  the  Chinese  National  Welfare 
Society  of  America,  1920,  p.  87. 

31.  Ibid.,  p.  87. 


TARIFF  AUTONOMY  385 

32.  Chin  Chu,  The  Tariff  Prohlem  in  China,  pp.  86-88. 

33.  The  Shantung  Question,  op.  cit.,  pp.  88-89. 

34.  Ibid.,  p.  89. 

35.  Treat}'  of  Peace  with  Austria,  Sup.  of  American  Journal 
of  Int.  Law,  Jan.  and  April,  1920;  Treaty  of  Peace  with  Hun- 
gary, June  4,  1920,  The  American  Journal  of  International  Law, 
Jan.,  1921. 


PART  V 

NEW  PROBLEMS  ARISING  SINCE  THE  WAR 

XXIV.     The    New    International    Banking    Con- 
sortium. 

XXV.     The    New    International    Banking    Con- 
sortium   (Continued). 

XXVI.     The  League  of  Nations  and  China. 

XXVII.    The  Shantung  Question. 


XXIV 

THE  NEW  INTERNATIONAL  BANKING 
CONSORTIUM 

If  there  is  any  factor  destined  to  affect  the  foreign  re- 
lations of  China  in  the  next  decade  or  so,  it  is  the  New 
International  Banking  Consortium.  From  a  business 
point  of  view,  it  is  nothing  more  than  an  international 
combine  of  the  banking  groups  of  the  United  States,  Great 
Britain,  France,  and  Japan,  for  the  purpose  of  coopera- 
tive investment  in  China;  but  from  the  viewpoint  of  his- 
tory and  the  political  situation  in  the  Far  East,  it  signifies 
more  than  mere  business,  and  is  pregnant  with  tremen- 
dous political  potentialities. 

The  new  consortium  is  not  a  novel  invention ;  it  has 
its  predecessor.  To  recall  what  has  been  said,  the  old 
consortium  was  formed  in  1908,  consisting  of  the  bankers 
of  France,  Great  Britain,  Germany,  and  the  United  States, 
which  concluded  the  Hukuang  Railway  loan  of  May  20, 
191 1.1  The  same  consortium  also  negotiated  the  cur- 
rency  and  industrial  development  loan  of  April  15,  191 1.2 
Subsequently,  this  quadruple  syndicate  was  expanded  into 
a  sextuple  consortium,  adding  to  its  memmbership  Russia 

and  Japan,  which,  despite  the  withdrawal  of  the  American 

group,  concluded  the  Reorganization  Loan  of  April  26, 
1913.8    With  the  advent  of  the  World  War.  the  sextuple 

irtium,  which  had  been  reduced  to  a  quintuple  group, 

d  into  oblivion. 
To  be  brief,  the  formation  of  the  new  consortium  dates 

from   L917,  when  a  suggestion  was  made  as  to  an  Amer- 
ican I  oan  to  <  hina  so  that  the  latter  could  he  equipped 

in    effective    participation    in    the-    World    War.       In 

June  of  1918,  the  Department  of  State  called  together 

389 


390      PR<  CLEMS  ARISING  SINCE  THE  WAR 

a  number  of  American  bankers  interested  in  Chinese 
finance.  As  an  outcome  of  the  conference,  it  was  decided 
that  in  addition  to  the  American  Group  of  Bankers,  the 
United  States  Government  would  request  the  govern- 
ments of  Great  Britain,  France,  and  Japan,  to  organize 
their  respective  banking  groups  and  participate  in  the 
new  consortium,  on  the  basis  of  full  equality  and  partner- 
ship. Accepting  the  principles  of  the  American  proposal, 
representatives  of  the  Allied  Powers  concerned  met  at 
the  Paris  Peace  Conference  on  May  11  and  12,  1919, 
when  several  resolutions  were  passed  and  an  agreement 
was  reached.  Upon  approval  of  the  governments  con- 
cerned, the  representatives  of  these  banking  groups  met 
in  New  York  City  in  October,  1920,  and  signed  the  agree- 
ment. 

To  be  more  specific,  the  formation  of  the  new  con- 
sortium is  a  long  story,  and  marked  by  several  diplomatic 
events  of  great  political  significance.  The  beginning  of 
the  project  goes  back  to  the  month  of  June,  1918,  when 
the  State  Department  called  together  the  American 
bankers  interested  and  experienced  in  Chinese  finance. 
At  the  conference,  the  project  of  loaning  to  China  and 
the  best  way  of  doing  so  were  discussed.  On  July  8, 
1918,  the  banking  firms  interested  (J.  P.  Morgan  &  Co., 
Kuhn,  Loeb  &  Co.,  The  National  City  Bank  of  New 
York,  the  First  National  Bank,  New  York,  the  Chase 
National  Bank,  the  Continental  and  Commercial  Trust  & 
Savings  Bank  of  Chicago,  Lee  Hegginson  &  Co.,  and 
the  Guaranty  Trust  Commpany  of  New  York),  informed 
the  Department  of  State  that  in  their  opinion  a  consortium 
of  the  banking  interests  of  the  four  Powers — the  United 
States,  Great  Britain,  France  and  Japan — should  be 
formed,  that  one  of  the  conditions  of  membership  should 
be  the  relinquishment  of  existing  or  future  options,  and 
that  in  case  of  a  loan  issue,  the  Department  of  State 
should  make  a  declaration  announcing  that  the  loan  was 


THE  NEW  BANKING  CONSORTIUM      391 

to  be  made  at  the  suggestion  of  the  Government.*  In 
response  to  this  communication,  the  Department  of  State 
replied,  on  July  9,  1918,  that  it  would  comply  with  the 
wishes  of  the  American  Bankers. 

As  a  fuller  statement,  the  Department  of  State  gave  to 
the  press  on  July  29,  1918,  the  statement  which  we  have 
quoted  in  the  chapter  on  The  Policy  of  the  United  States 
in  China,  setting  forth  the  essential  features  of  the  new 
policy." 

(1)  The  formation  of  a  group  of  American  bankers. 

(2)  The  cooperation  of  the  bankers  with  the  Depart- 
ment of  State,  particularly  with  reference  to  policies. 

(3)  The  approval  by  the  Department  of  State  of  the 
names  of  banks  composing  the  group. 

(4)  Approval  of  the  terms  and  conditions  of  the  loans 
by  the  Department  of  State. 

(5)  Diplomatic  support  in  the  execution  of  equitable 
contracts. 

(6)  The  formation  of  the  national  hanking  groups  of 
Great  Britain,  France  and  Japan  and  their  association 
with  the  American  group. 

Meanwhile,  the  Department  of  State  entered  into  nego- 
tiation with  the  Governments  of  Great  Britain,  France 
and  Japan.  On  August  14,  1918,  the  British  Foreign 
Office  asked  for  an  elucidation  of  the  scope  of  the  new 
consortium;  whether  the  contemplated  loan  was  to  be  ;i 
second  or  supplementary  Reorganization  Loan  or  an 
entirely  different  one;  whether  it  was  to  include  only 
administrative  loans  or  also  industrial  and  railway  loans, 
the  latter  of  which  were  excluded  from  the  scope  of  the 
former  consortium  by  the  intergroup  agreement  of  P 
September  26,  1913;  whether  the  relinquishment  of  op- 
tions was  to  include  only  the  options  nn  administrative 
loans  or  also  on  industrial  in  which  ease  the  British  Gov- 
ernment feared  to  concur  until  they  should  have  consulted 

the    British    interests    involved;   and    finally,    whether   the 


392      PROBLEMS  ARISING  SINCE  THE  WAR 

policy  of  maintaining  the  political  independence  and  sov- 
ereignty  of  China  was  to  preclude  any  possibility  of 
foreign  supervision  in  collection  of  revenues  pledged  as 
securities  and  the  employment  of  foreign  advisers  to 
supervise  the  introduction  of  reforms.0  Jn  reply,  the 
Department  of  State,  on  October  8,  1918,  despatched  a 
memorandum  covered  by  a  note,  to  the  French,  British 
and  Japanese  Embassies  explaining  that  it  was  not  the 
intention  of  the  United  States  Government  to  rejoin  the 
old  consortium,  but  that  a  new  one  was  to  be  organized  ; 
that  the  relinquishment  of  options  was  to  cover  all  options 
of  whatever  nature;  that  the  loans  were  to  include  both 
administrative  and  industrial  loans;  and  that  the  policy 
of  maintaining  the  political  integrity  and  sovereignty  of 
China  did  not  preclude  the  possibility  of  foreign  super- 
vision in  the  collection  of  revenues  pledged  as  securities 
and  the  employment  of  a  foreign  adviser  as  prescribed 
in  the  terms  of  the  loan.7 

On  March  17,  1919,  the  British  Foreign  Office  ace 
the  proposals  of  the  United  States  Government  for  a 
new  consortium,  setting  forth  as  their  understanding  that 
the  formation  of  the  four  Tower  group  should  not  preju- 
dice the  claims  of  Belgium  and  Russia,  that  financial 
operation  not  involving  a  Chinese  Government  guarantee 
or  a  public  issue  should  remain  open  to  all,  that  "the 
-roups  will  pool  nil  existing  and  future  options  except 
such  concession  as  may  be  already  in  operation,"  that 
each  national  group  will  receive  the  active  and  exclusive 
diplomatic  support  of  its  government,  and  further  adding 
that  the  contracts  for  the  execution  of  the  engineering  or 
other  works  to  he  built  out  of  the  proceeds  of  the  loan 
and  for  the  supply  of  the  necessary  materials  should  be 

put  up  to  public  tender  and  that  the  loans  to  hi'  made  in 
the  immediate  future,  in  view  of  the  dire  need  for  re- 
construction in  consequence  of  the  World  War,  should 
be  of  moderate  dimension-." 

On  May  11-12,  1919,  the  representatives  of  the  hank- 


THE  NEW  BANKING  CONSORTIUM      393 

ing  groups  of  Great  Britain,  France,  Japan  and  the  United 
States  with  the  sanction  of  their  respective  governments, 
met  at  the  Paris  Peace  Conference   for  the  purpose  of 

organizing  the  new  consortium.  A  set  of  resolutions  was 
unanimously  adopted  and  submitted  to  the  four  govern- 
ments concerned  for  approval.  On  May  31,  1919,  the 
United  States  Government,  in  a  note  to  the  French,  Brit- 
ish and  Japanese  Emhassies  announced  its  acceptance  and 
approval  of  the  resolutions  and  at  the  same  time  urged 
the  other  governments  to  give  similar  confirmation,  "in 
order  that  the  formation  of  the  new  consortium  may  be 
completed,  prior  to  the  expiration  of  the  old  consortium 
agreement  on  June  18,  next."  9 

On  June  7,  1919,  the  British  Foreign  Office  signified 
its  acceptance  and  approval  of  the  resolutions  with  the 
exception,  however,  to  "the  statement  in  the  preamble  of 
the  agreement  that  the  groups  are  entitled  to  the  exclu- 
sive support  of  their  respective  Governments,"  giving  as 
its  reason  that  the  British  Group  "have  hitherto  failed  to 
comply  with  the  conditions  on  which  alone  His  Majesty's 
Government  are  prepared  to  guarantee  exclusive  official 
support."  10  In  view  of  this  exception  of  the  British  For- 
eign Office,  at  the  suggestion  of  the  French  Government, 
the  formula  regarding  diplomatic  support  was  slightly 
modified,  the  principal  change  being  "in  pledging  each 
government  to  the  support  of  its  respective  national  group 
rather  than  to  the  consortium  collectively."  The  modified 
form  which  was  communicated,  on  July  3,  1918,  to  the 
French,  Japanese  and  British  Embassies,  reads  as  fol- 
lows:" "" 


"The  governments  of  each  of  the  four  participating 
groups  undertake  to  give  their  complete  support  to  their 
respective  national  groups  members  of  the  consortium  in 
all  operations  undertaken  pursuant  to  the  resolutions  and 

agreements  of  the   11th  and    12th   of    May,    L919,   n 

tively,  entered  into  by  the  bankers  of  Paris.    In  the  event 


394      PRI  >BLEMS  ARISING  SINCE  THE  WAR 

of  competition  in  obtaining  of  any  specific  loan  contract 
the  collective  support  of  the  diplomatic  representatives 
in  Peking  of  the  four  governments  will  be  assured  to  the 
consortium  for  the  purpose  of  obtaining  such  contract." 

On  July  17,  1919,  the  British  Foreign  Office  accepted 
the  American  formula. 1J 

(  >n  June  18,  1919,  Mr.  Odagiri  of  the  Yokohama  Specie 
Bank  communicated  with  Mr.  Thomas  W.  Lamont  of  J. 
P.  Morgan  &  Company,  setting  forth  the  Japanese  reser- 
vation of  Manchuria  and  Mongolia  from  the  scope  of 
the  new  consortium,  claiming  special  interests  therein 
arising  from  historical  and  geographical  relations  and  cit- 
ing as  a  precedent  the  same  Japanese  reservation  made  at 
a  meeting  of  the  Six  Power  Groups  held  at  Paris  on 
June  18,  1912.  A  similar  communication,  mutatis  mutan- 
dis, was  dispatched  to  the  representatives  of  the  British 
and  French  Groups.     His  letter  follows : 

"With  reference  to  our  interview  in  Paris,  and  Mr. 
Tatsumi's  conversation  with  you  on  the  16th  instant  in 
connection  with  the  proposed  new  consortium  for  Chinese 
business,  for  your  information  I  would  wish  to  communi- 
cate to  you  that  we  have  been  instructed  by  our  principals 
in  Japan  that  all  the  rights  and  options  held  by  Japan  in 
the  regions  of  Manchuria  and  Mongolia,  where  Japan 
has  special  interests,  should  be  excluded  from  the  ar- 
rangements for  pooling  provided  for  in  the  proposed 
agreement.  This  is  based  on  the  very  special  relations 
which  Japan  enjoys  geographically,  and  historically,  with 
the  regions  referred  to,  and  which  have  been  recognized 
by  Great  Britain,  the  United  States,  Prance  and  Russia 
on  many  occasions.  In  this  connection  I  would  wish  to 
specially  draw  your  attention  to  a  Note  from  the  Secre- 
tary of  State  to  the  Japanese  Ambassador,  dated,  Wash- 
ington, November  2nd,  1917. 

'Furthermore  the  following  matter  which  was  dealt 
with  under  the  present  Group  Agreement,  was  reserved 


THE  NEW  BANKING  CONSORTIUM      395 

by  the  Japanese  Group  at  the  time  of  signature  of  the 
Chinese  Reorganization  Loan  Agreement. 

"On  the  18th  of  June,  1912,  at  a  meeting  of  the  Six 
Groups  held  in  Paris,  when  discussing  the  agreement  for 
the  Chinese  Reorganization  Loan  about  to  be  issued,  the 
following  declaration  was  made  by  Mr.  Takeuchi  on  he- 
half  of  the  Japanese  Group  and  was  recorded  in  the  min- 
utes of  the  conference: 

"The  Japanese  Bank  declared  that  it  takes  part  in  the 
loan  on  the  understanding  that  nothing  connected  with 
the  projected  loan  should  operate  to  the  prejudice  of  the 
special  rights  and  interests  of  Japan  in  the  regions  of 
South  Manchuria  and  of  the  Eastern  portion  of  Inner 
Mongolia  adjacent  to  South  Manchuria." 

On  June  23,  1919,  Mr.  Lamont  acknowledged  the  re- 
ceipt of  the  letter,  but  in  a  firm  tone  rejected  the  reserva- 
tion. "Mongolia  and  Manchuria,"  he  said,"  are  import- 
ant parts  of  China,  and  any  attempt  to  exclude  them  from 
the  scope  of  the  Consortium  must  be  inadmissable."  At 
the  same  time  he  informed  the  Japanese  representative 
that  he  would  refer  the  question  to  the  Department  of 
State,  it  being  "beyond  the  immediate  competence  of 
the  financial  group  to  discuss."  In  refutation  of  the  pre- 
cedent cited  by  Mr.  Odagiri  respecting  the  previous  reser- 
::  made  on  June  18,  1912,  he  observed  that  the  Brit- 
ish, German,  French  and  American  Groups  bad  not  ac- 
cepted the  reservation  at  the  conference  of  that  date. 

"For  your  information   I  beg  to  recall  to  you  that  at   the 

same  time  there  Was  record  d  in  the  minutes  of  the  con- 
ference the  following  declaration:  'The  British,  French, 
German  and  American  Groups  stated  thai  they  were  un- 
to accept  or  consider  either  of  these  declarations 
upon  the  ground  that  they  were  not  competent  to  deal 
with  political  questions.'  " 

I:    attention  having  been  called  to  the  Japan 
vation,  the  Department  of  State  expressed  its  view 
July  30,  1919,  politely  declining  to  entertain  the  special 


PROBLEMS  ARISING  SINCE  THE  WAR 

:  ;  m  of  Japan.    "Reservations  of  regions  can  only 

impair  its  (the  consortium's)  usefulness  as  an  instrument 
.  and  limitations  on  its  activity  can  only  detract 
from  its  utility  as  a  means  for  promoting  international 
cooperatiori  among  those  most  interested  in  China.  More- 
over, as  all  the  other  parties  in  the  arrangement  have 

I  to  ]        their  rights  an  1  options  without  other  • 
vati  >n  than  that  contained  in  the  terms  of  the  agreement 
itself,  it  is  only  equitable  that  the  same  rule  should  apply 
to  all  alike."  "" 

Meantime,  on  August  11,  1919,  the  British  Foreign  Of- 
fice called  the  attention  of  the  Japanese  Government  to 
the  fact  that  her  special  reservation  would  be  contrary  to 
the  principle  of  the  new  consortium  and  would  tend  to 
give  Japan  a  preferred  and  special  status  in  the  consor- 
tium.15 

In  response,  the  Japanese  Government,  on  August  27, 
1919,  accepted  the  resolutions  adopted  at  the  Paris  Peace 

Conference  in  May,  1919,  but  still  insisted  on  the-  reser- 
vation of  South  Manchuria  an  1  Eastern  Inner  Mongolia 
from  the  scope  of  the  new  consortium  with  this  modifi- 
cation, however,  that  Manchuria  and  Mongolia  had  been 
changed  to  South  Manchuria  and  Eastern  Inner  Mongolia, 
thus  limiting  the  area  of  Japan's  special  interest.  The 
note  follows : 10 


"The   Japanese    Government    accept    and    confirm    the 
resolution  adopted  at  the  meeting  of  the  representatives 

of  the  hankers  groups  of  the  United  State-,  (  ireat  Britain, 
France  and  Japan  at  Paris  on  May  11  and  12,  1919,  for 
the  purpose  of  organizing  an  international  consortium  for 
financial  business  in  China;  provided,  however,  that  the 
acceptance  and  confirmation  of  the  said  resolution  shall 
not  be  held  or  construed  to  operate  to  the  prejudice  of 
pedal  rights  and  interests  possessed  by  Japan  in 
South  Manchuria  and  Eastern  Inner  Mongolia." 


THE  NEW  BANKING  CONSORTIUM      397 

In  response,  on  October  28,  1919,  the  Department  of 
State  declared  that  such  a  measure  would  revive  the 
doctrine  of  the  sphere  of  influence  even  in  a  worse  form 
than  was  followed  during  the  days  when  China  w; 
the  brink  of  disintegration,  but  assured  the  Japanese  Gov- 
ernment that  the  vested  interests  and  even  the  extension 
thereof  in  these  regions  would  be  excluded  from  the 
scope  of  the  consortium.17 

Similarly,  echoing  the  sentiment  of  the  United  States 
Government,  the  British  Foreign  Office,  on  November  20, 
1919,  notified  the  Japanese  Government  that  her  reserva- 
tion, based  as  it  was  on  territorial  claims,  would  be  con- 
trary to  the  principle  of  the  new  consortium  to  a! 
the  sphere  of  influence,  and  to  open  the  whole  of  China 
to  world  commerce.  Further,  while  assuring  Japan  that 
vested  interests,  including  railways  in  South  Manchuria, 
would  be  exempt  from  the  operation  of  the  new  consor- 
tium, it  pointed  out  that  inasmuch  as  Japan  had  not  as 
yet  established  any  vested  interests  in  Eastern  Inner  Mon- 
.  though  holding  options  therein  for  railways,  and 
especially  in  view  of  the  strategic  location  of  Eastern 
Inner  Mongolia  in  relation  to  Peking,  whose  southern 
boundaries  extended  and  practically  envelop  the  capital 
of  China,  the  reservation  of  such  a  sphere  of  influence 
would  be  irreconcilable  with  the  principle  of  the  main- 
tenance of  China's  independence  and  territorial  integrity. 
It  concluded  with  the  friendly  suggestion  that  Japan 
should  give  prompt  attention  to  the  situation,  "in  view 
of  the  disastrous  situation  on  the  verge  of  which  China 
appears  now  to  find  herself,"  hinting  apparently  at  the 
ible  insolvency  of  (  Ihina.17** 

(ailed  forth  by  the  remonstrances  of  the  United  States 
and  Great  Britain,  Japan,  on  March  2,  1920 — after  a 
silence  of  about  six  mouths  once  more  reenforced  her 
insistence  on  the  reservation  by  the  argument  of  national 

defense,   contending  that   South    Manehuria  and    Eastern 


398      PROBLEMS  ARISING  SINCE  THE  WAR 

Inner  Mongolia,  located  as  they  are.  are  vital  to  Japan's 
national  defense  and  economic  existence,  especially  in 
view  of  the  growing  menace  of  the  Russian  situation  in 

Siberia,  and  meanwhile  offering  instead  a  revised  formula 
of  reservation  retaining  to  Japan  the  power  of  veto,  or 
freedom  of  action,  in  case  of  loans  affecting  South  .Man- 
churia and  Eastern  Inner  Mongolia  calculated  to  menace 
the  economic  life  and  national  defense  of  Japan,  and 
giving  a  list  of  Japanese  railways  in  South  Manchuria 
which  are  to  be  excluded  from  the  control  of  the  con- 
sortium.1'' A  similar  communication  was  handed  to  the 
J'.ritish  Foreign  Office  on  March  16,  1920.10 

Meanwhile,  to  disentangle  the  situation,  at  the  request 
of  the  American  Banking  Group,  and  with  the  approval 
of  the  Department  of  State  and  of  the  British  and  French 
Banking  groups,  Mr.  Lamont  had  sailed  for  the  Far 
East  and  was  in  Japan  throughout  the  month  of  March, 
1920,  and  conducted  negotiations  in  person  with  the 
Japanese  Government.20  While  Mr.  Lamont  was  in  Japan, 
the  Department  of  State,  on  March  16,  1920,  once  more 
uttered  the  remonstrance  that  in  view  of  the  general 
recognition  accorded  to  the  right  of  national  self-preser- 
vation, and  further  of  the  Lansing-Ishii  Agreement  of 
September  2,  1917,  there  was  no  real  necessity  even  for 
a  reservation  under  the  form  of  the  revised  formula.  At 
the  same  time,  it  pointed  out  the  inconsistency  of  includ- 
ing in  the  reserved  list  the  projected  line  from  Taonanfu 
to  Jehol,  and  thence  to  the  coa>t.  which  is  not  essential 
to  the  national  safely  or  economic  existence  of  Japan.81 

Likewise,  on  March  19,  1920,  Earl  Curzon  responded 
to  Viscount  Chinda,  rejecting  the  revised  formula  aa  be- 
ing "so  ambigUOUS  and  general  in  character  that  it  might 
be  held  to  indicate  on  the  part  of  the  Japanese  Govern- 
ment a  continued  desire  to  exclude  the  cooperation  of 
the  other  three  banking  groups  for  participating  in  the 
development,  for  China's  benefit,  of  important  parts  of 


THE  NEW  BANKING  CONSORTIUM      399 

the  Chinese  Republic,"  and  declining  to  believe  that  "it 
is  essential  for  Japan  alone  to  construct  and  control,  for 
instance,  the  three  railway  lines  mentioned  in  the  third 
reservation  lying  to  the  west  of  South  Manchuria  Rail- 
way, and  finally  pledging  the  assurance  that  the  Japan- 
ese Government  need  have  no  reason  to  apprehend  that 
the  consortium  would  direct  any  activity  affecting  the 
economic  security  and  national  defense  of  Japan."  -lA 

In  view  of  the  persistent  opposition  of  the  United 
States  and  Great  Britain,  Japan  yielded.  Relying  upon 
their  assurances,  she  relinquished  the  request  for  the  ac- 
ceptance of  the  revised  formula,  on  condition  that  the 
other  Powers  should  give  similar  assurance.  Respecting 
the  railway  from  Tannanfu  to  Jehol  and  thence  to  a  sea- 
port, while  admitting  that  it  was  projected  "with  the 
strategic  object  of  making  it  a  means  of  common  de- 
fense on  the  part  of  China  and  Japan  against  foreign  in- 
vasion coming  from  the  direction  of  Ourga,"  Japan  like- 
wise yielded  and  assented  to  the  inclusion  of  the  line  or 
lines  in  Mongolia  within  the  operation  of  the  new  con- 
sortium. In  relinquishing  the  concession,  however,  she 
attached  two  conditions  which  she  asked  the  Towers  con- 
cerned to  accept.-'2  A  similar  despatch  was  sent  to  the 
British  Foreign  Office  on  April  14,  1()20.--A 

(1)  In  the  event  of  the  new  consortium  projecting  in 
future  a  scheme  of  extending  the  Taonanfu-Jehol  railway 
to  the  north  with  a  view  to  connection  with  the  Eastern 
Chinese  Railway,  the  assent  of  the  Japanese  Government 
thereto  must  he  obtained  beforehand  through  the  Japan- 
ese ,^rroup,  inasmuch  as  such  an  extension  being  tanta- 
mount to  a  renewal  of  the  so-called  Chinchou-Aigun  rail- 
way scheme  against  which  a  protesl  was  lodged  by  Japan 
when  the  question  was  motioned  some  years  ago,  LS  cal- 
culated to  have  a  serious  effect  upon  the  South  Manchuria 
Railway. 

(2)  In  consideration  of  the  particular  desire  of  Japan 


400      PROBLEMS  ARISING  SINCE  THE  WAR 

that  these  two  lines  should  he  built  as  speedily  as  possible, 
the  Japanese  group,  after  due  consultation  with  the  other 
groups,  may  be  permitted  to  undertake  their  construction 
single  handed  in  the  event  of  the  other  three  Powers  as- 
sociated in  the  new  Consortium  being  reluctant  to  finance 
it.  In  that  case,  having  regard  to  the  fact  that  these  rail- 
ways must  cross  the  Peking-Mukden  Railway  at  a  cer- 
tain point,  the  American  group  will  give  their  support  to 
the  overture  which  the  Japanese  financiers  will  make  to 
their  British  colleagues  with  a  view  to  perfecting  the 
junction  of  these  lines." 

Regarding  the  two  conditions,  Earl  Curzon  replied,  on 
April  28,  1920,  counseling  the  Japanese  Foreign  Office 
to  forego  the  conditions  and  be  satisfied  with  the  general 
assurance  as  given  above,  for  "granting  to  any  one  party 
to  the  consortium  the  power  to  veto  in  advance  the  pos- 
sible construction  of  a  railway  would  appear  to  be  con- 
trary to  the  principles  upon  which  the  idea  of  the  con- 
sortium is  based,"  and  because  the  second  condition 
would  be  included  in  the  articles  of  the  Inter-Group 
Agreement  of  May  12,  1919.  At  the  same  time  he 
withdrew  the  objection  of  the  British  Government  to  the 
exclusion  from  the  consortium  of  the  two  projected  lines 
from  Tannanfu  to  Changchun  and  from  Taonanfu  to 
Chengkiatun.-'3  In  the  same  way,  the  Department  of 
State,  on  April  29,  1917 — one  day  after  the  British  an- 
swer— replied  that  the  first  condition  of  retaining  the  veto 
power  would  be  contrary  to  the  principles  of  the  consor- 
tium and  the  second  condition  "would  appear  to  be 
already  provided  for  in  Article  IV  of  the  Inter-Group 
Agreement  at  Paris  on  May  12th,  paragraph  19,  of  which 
the  American  Government  has  expressed  its  approval."24 

I 

In  view  of  this  determined  resistance,  on  May  8,  1920, 
Japan  yielded,  this  time  completely.  She  waived  the  two 
conditions  as  above  set  forth,  and  consented  to  enter  the 
consortium   without  any   reservation  or   condition.-5     A 


THE  NEW  BANKING  CONSORTIUM      401 

similar  note  was  likewise  despatched  to  the  British  For- 
eign Office  on  May  11.  1920.2'  On  May  8,  1920.  the  De- 
partment  of  State  expressed  its  gratification  at  the  with- 
drawal of  all  conditions  and  reservations  by  Japan  and 
its  expectation — "that  such  practical  juint  endeavor  is 
the  beginning  of  a  new  era  of  good  will  and  a 
plishment  for  both  governments."-'7  Similarly  on  May 
17,  1920.  the  British  Foreign  Office  expressed  its  gratifi- 
cation, and  reiterated  the  assurance.-' 

On  May  25,  1920,  the  much  belated  word  came  from 
the  French  Government  pledging  to  observe  the  same 
general  assurance  as  given  by  the  American  Govern- 
ment.*' 

Meanwhile.  Mr.  Lamont  had  already  reached  a  com- 
promise at  Tokio,  which  consisted  of  transferring  to  the 
Consortium  the  line  from  Taonanfu  to  Jehol  and  another 
line  from  any  point  on  the  Taonanfu-Jehol  Railway 
to  a  seaport  and  of  excluding  the  other  railways  as 
enumerated  below  from  the  scope  of  the  consortium.  On 
her  part,  Japan  engaged  to  withdraw  all  reservations  in 
toto.  This  compromise  was  embodied  in  an  exchange  of 
letters  on  May  11,  1920,  as  follows:30 

N.  Kajiwara  to  T.  W.  Lamont.  May  11,  1920. 

"We  have  now  the  honor  to  inform  you  that  certain 
points  in  the  Agreement  and  in  the  operations  of  the  pin- 
posed  consortium,  hitherto  somewhat  obscure,  having 
been  chared  up  to  the  satisfaction  of  our  Government 
and  of  ourselves,  we  are  now  able  in  accordance  with 
the  instructions  of  the  Japanese  (  iovernincnt  to  withdraw 
our  letter  dated  18th  June  last  and  announce  that,  con- 
jointly with  the  American.  British  and  French  Banking 
Groups  and  on  like  terms  with  them,  we  will  accept  the 
consortium  agreement    We  In '4  at  the  same  time  I 

our  hearty  concurrence  with  the  general   ideas  and 

objects  of  the  consortium  in  respect  to  China." 

T.  W.  Lamont  to  X.  Kajiwara.  May  11,  L920. 


402      PROBLEMS  ARISING  SINCE  THE  WAR 

"We  beg  to  acknowledge  with  thanks,  the  receipt  of 
your  communication  of  May  11th,  1920,  informing  us, 
in  behalf  of  the  Japanese  Banking  Group  that,  under  the 
instructions  of  your  Government,  you  have  now  with- 
drawn your  letter  dated  June  18th,  1919,  and  have 
adopted,  in  association  with  the  Banking  Groups  of 
America,  Great  Britain  and  France  and  on  like  terms 
with  them,  the  agreement  for  the  establishment  of  a  New 
Consortium  in  respect  to  China. 

"Inasmuch  as  some  questions  have  arisen  during  our 
discussions  as  to  the  status  of  specific  railway  enter- 
prises contemplated  or  actually  begun  in  Manchuria  and 
Mongolia,  we  hereby  confirm  that  we  have  agreed  with 
you  as  follows : 

"(1)  That  the  South  Manchurian  Railway  and  its 
present  branches,  together  with  the  mines  which  are  sub- 
sidiary to  the  railway,  do  not  come  within  the  scope  of 
the  consortium ; 

"(2)  that  the  projected  Taonanfu-Jehol  Railway  and 
the  projected  railway  connecting  a  point  on  the  Taonan- 
fu-Jehol Railway  with  a  seaport  are  to  be  included  within 
the  terms  of  the  Consortium  Agreement ; 

"(3)  that  the  Kirin-Huining,  the  Chengchiatun-Taon- 
anfu,  the  Changchun-Taonanfu,  the  ECaiyuan-Kirin  (via 
Ilailung),  the  Kirin-Changchun,  the  Sinminfu-Moukden 
and  the  Supingkai-Chengchiatun  Railways  are  outside 
the  scope  of  the  joint  activities  of  the  consortium. 

"The  foregoing  letter  of  acknowledgment,  although 
written  in  behalf  of  the  American  Banking  Group,  has, 
we  are  assured,  the  cordial  approval  of  the  British  and 
French  Banking  Groups,  also  of  the  Governments  of  the 
United  States,  of  Great  Britain  and  of  France." 

Having  thus  smoothed  the  way  by  the  compromise,  the 
representatives  of  the  four  national  hanking  groups  met 
in  New  York  City  in  October,  1920.  At  the  conference, 
the  application  of  the  Belgian  Banking  Group  was  ac- 


THE  NEW  BANKING  CONSORTIUM      403 

cepted,  subject  to  the  approval  of  the  four  governments 
already  involved.  The  suggestion  was  also  favorably 
entertained  of  welcoming  a  Chinese  National  Banking 
Group,  provided  such  a  unit  should  be  formed  in  China. 
It  was  further  agreed  to  inquire  of  the  Chinese  Govern- 
ment as  to  the  possible  measures  to  be  taken  to  render 
assistance  to  the  currency  reform  of  China.  Respecting 
the  German-issued  bonds  of  the  Hukuang  Railway  Loan 
of  1911,  the  interest  charges  of  which  the  Chinese  Gov- 
ernment had  withheld,  the  conference  resolved  to  ask  the 
Chinese  Government  to  recognize  these  bonds  just  as  the 
other  bonds  of  the  entire  issue.  Particular  attention  was 
also  given  to  the  new  railways,  improved  methods  of  com- 
munication, the  purchase  of  materials,  standardization  of 
railway  equipments,  etc. 

On  October  15,  1920,  the  Consortium  agreement  was 
signed,  and  the  New  Consortium  was  formally  organized. 


NOTES  TO  CHAPTER  XXIV 

1.  MacMurray,  1911/5. 

2.  MacMurray,  1911/2. 

3.  MacMurray,  1913/5. 

4.  Documents  Concerning  the  New  Consortium,  released  to 
press  by  the  Department  of  State,  March  30,  1921,  Am.  Bankers 
to  Dept.  of  State,  July  8,  1918. 

4A.    Ibid.,  Department's  Letter  of  July  9,  1918,  to  the  Bankers. 

5.  N.  Y.  Times,  July  30,  1918. 

6.  Documents  Concerning  the  New  Consortium,  British  For. 
Office  to  American  Embassy,  London,  Aug.   14,  1918. 

7.  [bid.,  Department's  Note  ami  Memorandum  to  the  French, 
British  and  Japanese  Embassies,  Oct.  8,  1918. 

8.  Ibid.,  British  For.  Office  to  American  Embassy,  London, 
March  17,  I'M''. 

9.  Ibid.,  Department's  Note  of  May  31,  1919,  to  the  French, 
British  and  Ja]  ies, 

10.  Ibid.,  British  Embassy.  Washington,  to  the  Department  of 
Stat,-,  June  7.  I'M'*. 

11.  Ibid..  Department's  Note  of  July  3,  to  French,  Ja; 

an<l   British   Emba    l        etting   forth  tin-  d  .    diplomatic 

support   to  I  ,•  ,i   C01  'I'  'I   to  th<  im. 

12.  Ibid.,  British  I  to  Am<  i  ii  an  Emba  \,  London, 
July  17,  1919. 


404      PROBLEMS  ARISING  SINCE  THE  WAR 

13.  Ibid.,    Letter    fr  inn    Mr.   Thomas   W.    Lamont   to   Mr.   M. 
iri,  dated  June  23,  1919. 

14.  Ibid.,  Memorandum  of  the  Dept.  of  State  to  the  Japanese 
Embassy,  Juh  30,  1919. 

15.  Ibid.,  Memorandum  of  the  British  For.  Office,  Aug.  11, 
1919. 

16.  Ibid.,  Imperial  Japanese  Embassy,  Washington,  Aug.  27, 
1919. 

17.  [bid.,  Dept's  Reply,  Oct,  28,  1919,  to  the  Memorandum  of 
the  Japan*  se  Embassy,  dated  August  27,  1919. 

17A.  Rid.,  Karl  Curzon's  Memorandum  to  the  Japanese  Am- 
bassador. Nov.  20,  1919. 

I  hid.,  Memo,  of  Imperial  Japanese  Embassy,  Wash.,  Mch. 
2,  1920. 

19.  Ibid.,  Memo,  left  with  Lord  Curzon  by  the  Japanese  Am- 
bassador, Mch.   16,   1920. 

20.  Thomas  W.  Lamont,  Preliminary  Report  on  the  New  Con- 
sortium for  China,  p.  8. 

21.  Documents,  op.  cit.,  Dept.'s  Memo.,  Mch.  16,  1920,  to  the 
Japanese  Embassy  in  reply  to  the   Japanese  Memo,  of  Mch.  2. 

21A.    Ibid.,  Karl  Curzon  to  Viscount  Chinda,  Mch.  19,  1920. 

22.  Ibid.,  Imperial  Japanese  Embassy,  Washington,  Apr.  3, 
1920. 

22A.  Ibid.,  Memo,  left  with  Sir  Eyre  Crowe  by  the  Japanese 
Ambassador,  April  14,  1920. 

23.  Ibid.,  Karl  Curzon  to  Viscount  Chinda,  Apr.  28,  1920. 

24.  Ibid.,  Dept.'s  Reply,  Apr.  29,  1920.  to  the  Memorandum 
from  the  Japanese  Embassy  of  Apr.  3,  l(;Jo. 

25.  Ibid.,  Imperial  Japanese  Embassy,  Washington,  May  8, 
1920. 

26.  Ibid.,  Memorandum  Communicated  by  Japanese  Embassy 
to  British  Foreign  Office,  May  11.  1920. 

27.  Ibid.,  Dept.'s  Reply  to  the  Note  of  the  Japanese  Embassy, 
May  8,  1920. 

28.  Ibid..  Memorandum  Communicated  to  Japanese  Embassy 
by  British  1  or.  Office,  May  17,  1920. 

29.  Ibid.,  French  Gov't  to  Japanese  Emb.,  May  25,  1920. 

30.  Ibid.,  Letter  to  Mr.  Thomas  W.  Lamont  from  Mr.  N. 
Kajiwara,  dated  May  11,  1920;  letter  from  Mr.  Thomas  W. 
Lamont  to  Mr.  X.  Kajiwara,  May  11,  1920;  also  cf.  Millard's 
Review,  Oct  2i,  1920. 


XXV 

THE  NEW  INTERNATIONAL  BANKING 
CONSORTIUM   (cont.) 

The  constitution  of  the  New  Consortium  is  found  in 
the  agreement  of  October  15,  1920. 1  The  purposes  are 
to  negotiate  and  carry  out  Chinese  loan  business  and  to 
supply  the  Chinese  Government  with  the  necessary  capi- 
tal for  economic  reconstruction  and  improved  communi- 
cations. They  are  embodied  in  the  Preamble  of  the 
Agreement  as  follows : 

"And  whereas  the  British,  French,  Japanese  and 
American  Groups  were  formed  with  the  object  of  nego- 
tiating and  carrying  out  Chinese  loan  business 

"And  whereas  the  said  national  groups  are  of  the 
opinion  that  the  interests  of  the  Chinese  people  can 
in  existing  circumstances  best  be  served  by  the  coopera- 
tive action  of  the  various  banking  groups  representing 
the  investment  interests  of  their  respective  countries  in 
procuring  for  the  Chinese  Government  the  capital  m 
sary  for  a  program  of  economic  reconstruction  and 
improved   communications." 

The  requisites  of  the  Consortium  to  dpi  rati-  in  China 
are  the  diplomatic   support  given  by  each  Government 

interested    to    their    respective    national    banking    groups, 

and   in  case  of  competition   in   contracts,  to  the   Con- 
sortium as  a  whole,  as  set  forth  in  the  Preamble: 

"And  whereas  their  respective  Governments  have  un- 
dertaken to  give  their  complete  support  to  their  n 

tivc  national  group-  the   parties  hereto  in  all  operations 

405 


406      PROBLEMS  ARISING  SINCE  THE  WAR 

undertaken  pursuant  to  the  agreement  hereinafter  con- 
tained and  have  further  undertaken  that  in  the  event  of 
competition  in  the  obtaining  of  any  specific  loan  contract 
the  collective  support  of  the  diplomatic  representatives 
in  1 'eking  of  the  four  Governments  will  be  assured  to 
the  parties  hereto  for  the  purpose  of  obtaining  such 
contract. 

The  membership  in  the  New  Consortium  is  limited  to 
the  National  Banking  Groups.  The  admission  of  a  new 
National  Banking  Group  requires  the  unanimous  consent 
of  the  parties,  subject  to  the  approval  of  their  respec- 
tive Governments.  Each  National  Banking  Group  pos- 
sesses the  right  to  increase  or  decrease  its  own  mem- 
bership, but  shall  not  admit,  without  the  consent  of  the 
other  Groups,  any  new  member  that  does  not  belong 
to  the  nationality  of  the  Banking  Group  and  domiciled 
in  its  market,  and  shall  bind  the  withdrawing  member 
to  the  observance  of  the  restrictive  provisions  of  the 
Consortium  and  the  incoming  member  to  abide  by  the 
same   (Article  1). 

The  scope  of  the  New  Consortium  does  not  include 
the  vested  interests  nor  the  existing  agreements  as  to 
industrial  undertakings  in  which  substantial  progress  can 
be  shown  to  have  been  made,  nor  does  it  aim  to  invade 
the  domain  of  private  enterprises  in  banking,  industry 
or  commerce.  It  covers,  rather,  the  existing  loans  in 
which  no  substantial  progress  has  been  as  yet  made,  and 
all  future  loans,  administrative,  political,  industrial,  and 
financial,  to  be  made  to  the  Chinese  Government  or  any 
province.  To  be  more  specific,  it  aims  "to  include  within 
its  scope  only  those  basic  transportation  systems,  high- 
ways reorganization  of  the  currency,  etc.,  which  would 
serve  to  establish  sounder  economic  conditions  through- 
out China  and  thus  form  a  firmer  foundation  for  the 
encouragement  of  private  initiative  and  trade."  2     Arti- 


THE  NEW  BANKING  CONSORTIUM      407 

cl'e  2  of  the  agreement  sets  forth  the  scope  of  the  Con- 
sortium as  follows : 

"This  agreement  relates  to  existing  and  future  loan 
agreements  which  involve  the  issue  for  subscription  by 
the  public  of  loans  to  the  Chinese  Government  or  to 
Chinese  Government  Departments  or  to  Provinces  of 
China  or  to  companies  or  corporations  owned  or  con- 
trolled by  or  on  behalf  of  the  Chinese  Government  or  to 
any  party  if  the  transaction  in  question  is  guaranteed 
by  the  Chinese  Government  or  Chinese  Provincial  Gov- 
ernments  but  does  not  relate  to  agreements  for  loans  to 
be  floated  in  China.  Existing  agreements  relating  to  in- 
dustrial undertakings  upon  which  it  can  be  shown  that 
substantial  progress  has  been  made  may  be  omitted  from 
the  scope  of   this  agreement." 

At  the  same  time,  however,  it  was  mutually  agreed 
that  the  existing  agreements  or  future  loan  agreements 
within  the  scope  of  the  Consortium  should  be  subject  to 
the  provisions  of  the  Consortium  Agreement  (Arti- 
cle 3). 

The  rights  and  the  duties  of  the  constituent  groups 
arc  defined  on  the  principle  of  complete  equality.  That 
is  to  say,  every  group  enjoys  the  same  rights  and  carries 
the  same  obligations  as  the  other.  To  be  more  specific, 
equal  rights  are  accorded  to  all  in  all  operations,  the 
signing  of  contracts,  the  equal  sharing  in  existing  agree- 
ments and  future  contracts,  and  in  the  liberty  to  decline 
participation.  ( In  the  other  hand,  equal  obligations  are 
placed  upon  all  groups  for  exp  mnected  with  any 

business,    for    preliminary    advances    in    any    transaction, 
ting  stamp  duties  and  the  profits  and  losses  of  each 
group  in   their  operations    (Article  4). 

pecting  liability,  each  group  is  to  liquidate  its  own 
liabilities,  disclaiming  any  responsibility  for  joint  lia- 
bility. Furthermore,  each  group  is  to  realize  its  own 
profits    within    its    own    market,    on    the    understanding, 


408      PROBLEMS  ARISING  SINCE  THE  WAR 

however,  that  the  issues  in  each  market  are  to  be  made 
at  substantial  parity   (Article  5). 

Inasmuch  as  it  is  quite  possible  and  probable  that,  in 
consequence  of  war,  the  groups  will  not  be  able  to  share 
the  loans  equally,  in  view  of  the  needs  for  reconstruc- 
tion in  Great  Britain  and  France,  but  must  be  com- 
pelled  to  allow  the  group  or  groups,  meaning  particu- 
larly the  American  group,  to  assume  the  greater  share 
of  the  burden,  it  is  therefore  provided  that  the  party 
or  parties  unable  to  take  an  equal  share  of  the  burden 
allotted  or  entitled  can  ask,  in  writing,  the  other  party  or 
parties  who  are  competent  and  willing  to  make  the  ad- 
ditional issue  for  their  account,  which  is  known  as  "the 
Residuary  Participation"    (Article  6). 

As  the  system  of  Residuary  Participation  is  liable  to 
be  abused  and  thus  to  imperil  the  interests  of  the  other 
parties,  rigid  conditions  are  stipulated  to  safeguard  the 
proper  operation  of  the  system.  Notice  of  such  Residu- 
ary Participation  must  be  given  and  received  prior  to 
the  execution  of  the  agreement.  The  party  so  requested 
is  to  be  free  to  decide  the  apportionment  of  the  addi- 
tional issue  among  its  own  members,  or  else  they  shall 
share  them  equally  among  themselves.  The  issues  in 
pursuance  of  Residuary  Participation  shall  be  placed  on 
a  parity  with  the  regular  issue.  The  party  issuing  the 
Residuary  Participation  shall  be  free  to  decide  upon  the 
expenses  in  connection  with  its  flotation.  It  is  entitled 
to  a  commission  of  not  more  than  one  and  one-half  per 
cent  of  the  nominal  amount  of  the  Residuary  Participa- 
tion and  to  charge  the  party  or  parties  making  the  re- 
quest for  expenses  in  connection  with  the  issuance,  these 
to  be  calculated  in  accordance  with  the  proportion  which 
the  Residuary  Participation  bears  to  the  entire  ismie.  It 
is  not  required  to  subscribe  thereto,  nor  to  cause  others 
to  do  likewise.     It  shall  "apply  all  subscriptions  received 


THE  NEW  BANKING  CONSORTIUM      409 

by  it  pro  rata  between  the  Residuary  Participation  by  it 
and  the  amount  issued  by  such  party  on  its  own  ac- 
count." It  shall  "use  its  best  endeavors  to  obtain  a 
quotation  on  its  own  market  for  the  total  amount  issued 
by  it."  Mutual  agreement  of  the  parties  making  the  re- 
quest and  those  requested  is  necessary  to  any  issue  of 
Residuary   1  'articipation. 

Each  party  enjoys  exclusive  control  of  its  own  market 
as  far  as  the  issuance  of  the  bonds  is  concerned.  No 
participation  can  be  given  to  any  outside  its  own  mar- 
ket   (Article  7). 

The  duration  of  the  New  Consortium  is  fixed  at  five 
years — that  is,  1920  to  1925 — but  subject  to  this  con- 
dition, that  the  majority  of  the  parties  can  determine 
its  duration  at  any  time  by  giving  twelve  months'  notice 
in  writing  to  the  other  parties  concerned,  which  means 
that  the  majority  of  the  parties  can  terminate,  or 
shorten,  or  lengthen,  the  period  of  duration  at  will 
(Article  8). 

Such  being  the  Constitution  of  the  New  Consortium, 
let  us  now  observe  its  dealings  with  the  Chinese  Govern- 
ment, so  far  as  they  have  been  made  known  to  the  pub- 
lic. On  September  28,  1920,  before  the  Conference  in 
New  York  City  in  October,  1920,  the  American,  British, 
French  and  Japanese  Legations  at  Peking  despatched  a 
joint  note  to  the  Chinese  Foreign  Office,1  informing  the 
latter  of  the  formation  of  the  New  Consortium,  setting 
forth  its  purposes,  scope,  and  the  amount  of  diplomatic 
support  the  respective  Governments  are  pledged  to  give, 
together  with  a  collection  of  documents  dealing  with  the 
otiations  for  the  formation  of  the  New  Consortium, 
and  ending  with  the  wish,  "for  the  early  consummation 
of  a  united  Government  in  China  so  that  the  New  Con- 
sortium may  eventually  he  enabled  t0  give  practical  ex- 
pression to  the  desires  of  the  tour  Governments  con- 


410      PROBLEMS  ARISING  SINCE  THE  WAR 

cerned  to  assist  in  the  future  development  of  this  coun- 
try." 

On  receipt  of  this  note,  informal  conferences  took 
place  at  the  Chinese  Ministry  of  Finance.  Expressing 
the  view  of  the  Chinese  people,  although  the  note  took 
the  form  of  a  personal  opinion,  Mr.  Chow  Tsu-chi,  Chi- 
nese Minister  of  Finance,  communicated  to  the  repre- 
sentatives of  the  Consortium  Banks  on  November  26, 
1920,  as  follows:4 

"In  pursuance  of  our  conversation  at  the  Ministry  of 
Finance  on  November  23,  I  deem  it  expedient,  in  order 
to  remove  any  misunderstanding  as  to  my  personal  atti- 
tude with  regard  to  the  Consortium,  to  set  down  the 
following  points : 

"1.  It  is  necessary  that  the  Government  of  China 
should  at  this  juncture  secure  financial  aid  for  construc- 
tive purposes. 

"2.  If  the  Government  is  compelled  to  resort  to  for- 
eign loans  for  this  purpose  (a)  I  personally  cannot  ad- 
vise that  any  agreement  embodying  conditions  calculated 
to  establish  a  financial  monopoly  should  be  signed  with 
any  bank  or  group  of  banks;  nor  (b)  can  I  advise  that 
any  loan  agreement  be  negotiated  where  the  Land  Tax 
of  China  should  be  set  down  as  security  and  placed 
under   foreign   jurisdiction. 

"The  Consortium  has  been  formed  with  the  object  of 
assisting  China  in  her  reorganization.  China,  particu- 
larly myself,  heartily  welcomes  such  evidence  of  good 
will  on  the  part  of  foreign  financiers,  but  expects  that 
it  will  be  manifested  in  a  manner  that  will  leave  no 
doubt  in  the  minds  of  the  people  of  China  as  to  the 
motives  which  animate  the  foreign  bankers  and  which 
will  correct  the  impression  now  prevailing  that  their  na- 
tional freedom  is  being  mortgaged." 

In  reply,  the  representatives  of  the  Banking  Groups 
expressed   their  views  as   follows :  * 

"At  your  Excellency's  request  the  general  scheme  of 
the  Consortium   for  a  comprehensive  constructive  loan 


THE  NEW  BANKING  CONSORTIUM      411 

to  China  for  productive  purposes,  such  as  the  construc- 
tion of  railways,  was  described,  and  the  reasons  for  this 
policy,  as  well  as  for  the  fact  that  our  instructions  did 
not  include  the  consideration  of  a  loan  for  purely  ad- 
ministrative purposes,  were  clearly  explained.  At  the 
same  time  we  communicated  the  conditions  which  in 
the  opinion  of  the  Consortium  were  absolutely  necessary 
for  the  successful  issue  of  any  loan  for  China  on  the 
foreign  markets,  viz.:  (1)  the  recognition  of  all  Ger- 
man Bonds  and  Coupons  of  existing  Chinese  Govern- 
ment Railway  Loans,  and  (2)  the  provision  of  a  sepa- 
rate security  in  the  case  of  future  railway  loans.  We 
further  answered  Your  Excellency's  inquiries  regarding 
the  present  position  of  the  Pacific  Development  Corpo- 
ration Contract,  and  the  views  of  the  Consortium  on 
the  question  of  taking  over  this  agreement.  It  is  there- 
fore necessary  to  state  as  clearly  as  possible  that  not 
only  was  no  proposal  mooted  on  behalf  of  the  Con- 
sortium which  included  'conditions  calculated  to  estab- 
lish a  financial  monopoly,'  but  also  that  during  the  inter- 
view no  mention  was  made  on  either  side  of  the  Land 
Tax  of  China  as  a  possible  security  for  any  loan  to  be 
made.  .  .  . 

"If,  as  stated  by  Your  Excellency,  it  is  possible  that 
China  can  herself  presently  find  the  money  necessary  for 
her  reorganization,  the  groups  will  learn  with  the  great- 
. i  i-f action  of  the  success  of  her  efforts  in  this  direc- 
tion, and  we  are  certain  that  she  will  have  not  only  the 
entire  sympathy,  but,  as  far  as  possible,  the  cooperation 
of  the  Consortium  in  her  endeavors  to  achieve  that 
end." 

In   view   of    this   protest,    Mr.    Chow   TsU-Chl    made   a 
polite   retreat   and    answered   that    inasmuch   as    the    New 

Consortium  entertained  no  motive  or  intention  of  estab- 
lishing a  financial  monopoly  or  of  obtaining  the  Land 
icurity,  he  was  much  gratified  at  the  assurance. 
On  January  13,  1921,  the  American,  British,  French 

and   Japai  •    another   joint    BOte   to   the 


412      PR<  IBLEMS  ARISING  SINCE  THE  WAR 

Chinese  Foreign  Office  informing  the  latter  of  the  sign- 
ing of  the  Consortium  Agreement  on  Octoher  15,  1920, 
and  of  the  full  approval  of  the  New  International  Asso- 
ciation by  the  four   Powers  interested/* 

The  significance  of  the  New  Consortium  cannot  be 
over-estimated.  It  is  the  physical  embodiment  of  the 
policy  of  the  Powers — the  policy  of  international  co- 
operation and  control.  It  will  be  remembered  that,  with 
the  realization  of  the  evil  consequences  of  cut-throat 
competition,  the  Powers  have  since  the  Chinese  Revo- 
lution of  1911,  adopted  the  policy  of  international  co- 
operation and  control.  In  consequence,  the  old  con- 
sortium was  formed  and  contracted  the  loans  for  the 
Ilukuang  Railway  and  the  Currency  Reform  of  1911, 
and  the  Reorganization  Loan  of  1913.  Interrupted 
partly  by  the  withdrawal  of  the  American  Group  re- 
sulting in  the  loss  of  a  moral  leader  within  the  Old  Con- 
sortium, but  largely  by  the  interposition  of  the  World 
War,  which  withdrew  the  struggling  Towers  from 
"their  happy  hunting  ground"  of  the  Far  East  to  the 
ghastly  arena  of  the  European  battlefields,  this  common 
policy  was  temporarily  laid  aside.  As  soon,  however, 
as  the  World  War  was  over,  the  Great  Powers  resumed 
the  old  policy,  and  hence  the  formation  of  the  New 
Consortium.  It  can  therefore  be  said  that  the  New 
Consortium  embodies  and  represents  the  policy  of  In- 
ternational Cooperation  and  Control  during  the  present 
period  of   China's  history. 

Further,  the  New  Consortium  is  a  practical  assertion 
of  the  Open  Door  Doctrine  on  the  part  of  the  United 
States.  While  respecting  vested  interests,  it  pro] 
as  far  as  possible,  to  demolish  the  walls  of  spheres  of 
interest  or  influence.  By  pooling  all  existing  options 
in  which  no  substantial  progress  has  been  made  and  all 
future  options,  administrative,  industrial  or  otherwise, 
and  by  offering  to  public  tender  the  execution  of  engi- 


THE  NEW  BANKING  CONSORTIUM      413 

neering  contracts  and  the  purchase  of  materials,  it  estab- 
lishes a  condition  of  true  equality  of  trade  which  did 
not  obtain  under  the  old  regime  of  international  struggle 
for  concessions,  or  under  the  doctrine  of  Closed  Spheres. 
By  mitigating  the  evils  of  spheres  of  interest  or  influ- 
ence, and  by  requiring  the  submission  of  all  agreements 
to  the  approval  of  the  Governments  concerned,  particu- 
larly the  Department  of  State  of  the  United  States,  il 
tends  to  maintain  the  political  independence  and  the 
sovereignty  of  China.  Hence  it  is  the  incarnation  of 
the  Open  Door  Doctrine. 

Moreover,  the  New  Consortium  aims  to  put  into 
operation  the  new  policy  of  the  internationalization 
of  Chinese  railways.  Asserting  as  it  does  the 
Open  Door  Doctrine  which,  as  we  recall,  with  respect 
to  railways,  must  either  adopt  the  principle  of  interna- 
tionalization, or  exclude  them  entirely  from  the  scope 
of  its  application,— because  of  the  monopolistic  nature 
of  railways, — it  cannot  enter  into  the  field  of  Chinese 
investment  except  in  the  path  of  the  internationalization 
of  these  concessions.  With  the  existing  railways,  already 
in  operation  or  under  construction,  or  in  which  sub- 
stantial progress  has  been  made,  it  does  not  aim  to 
interfere,  except  in  so  far  as  the  Chinese  Government 
or  the  Provinces  desire  to  make  an  international  loan 
to  redeem  the  foreign  railways,  which,  however,  is  con- 
ditioned upon  the  the  consent  of  the  New  Consortium 
to  assume  the  burden  and  upon  the  willing  cooperation 
of  the  Powers  owning  and  operating  these  railways. 
With  existing  railway  concessions,  in  which  little  or  no 
substantial  progress  has  1"  en  made,  and  with  all  future 
railway  concessions  and  other  public  and  basic  under- 
takings, such  as  Hukuang,  Second  Reorganization,  (  ur- 
rency  Reform,  Pukow-Sinyang,  Nanking-Hunan,  Jehol- 
Taonan,  I  sinan-Shunteh,  Kaomi-Hsuchow,  Siems-Carey, 
Grand  (anal,  and  so  forth,  it  proposes  to  apply  the 
policy    of    internationalization.       1 bus,    what    Secretary 


414      PROBLEMS  ARISING  SINCE  THE  WAR 

Knox  hoped  to  carry  out  in  his  plan  of  the  neutraliza- 
tion of  Manchurian  railways  is  now  to  be  applied 
openly  to  all  the  railways  of  China  to  be  constructed  in 
future,  and  to  all  other  public  and  basic  undertakings, 
falling  within  the  scope  of  the  New  Consortium.  As 
to  whether  this  policy  of  internationalization  includes 
only  international  finance,  or  also  international  admin- 
istration and  hence  control,  it  remains  to  be  seen  in  the 
contracts  that  are  to  be  concluded.  It  is,  however,  to 
be  hoped  that  the  policy  of  internationalization  will 
cover  only  international'  finance,  and  will  not  include 
international  administration  and  control,  which  will  in- 
fringe upon  and  impair  the  sovereignty  of  China. 

Furthermore,  the  New  Consortium  neutralizes  Japan's 
efforts  to  control  China.  Had  it  not  been  for  the  early 
formation  of  the  New  Consortium,  as  China  tottered  on 
the  brink  of  bankruptcy,  Japan,  by  repeated  loans,  might 
have  this  day  fairly  reached  the  goal  of  controlling 
China  through  finance.  As  it  is,  and  especially  as  the 
Department  of  State  and  Thomas  W.  Lamont  success- 
fully warded  off  Japan's  reservation  as  to  South  Man- 
churia and  Eastern  Inner  Mongolia  and  brought  her  into 
the  fold  of  the  New  Consortium  without  any  reservation 
or  condition,  obligating  Japan  to  observe  the  canons  of 
the  Consortium,  it  has  definitely  neutralized  her  efforts 
to  control  China,  or  at  least,  has  placed  an  almost  in- 
surmountable difficulty  before  Japan's  ambition  in  this 
direction. 

On  the  other  hand,  with  the  advent  of  the  New  Con- 
sortium, China  is  face  to  face  with  the  moral  crisis  of 
choosing  the  right  way  at  the  parting  of  the  roads.  She 
can  avail  herself  of  the  assistance  the  New  Consortium 
can  render  and  use  the  loans  contracted  for  constructive 
purposes  and  thus  build  up  her  own  economic  structure 
and  stabilize  her  own  political  equilibrium.  In  this  way 
she  can  find  her  salvation  and  derive  benefit  from  the 
New  Consortium  without  incurring  its  perils.     Or,  she 


THE  NEW  BANKING  CONSORTIUM      415 

can  contract  loans  for  administrative  and  consumptive 
purposes,  wasting  the  proceeds  of  loans  and  pawning 
her  national  assets,  one  after  the  other.  In  this  way, 
she  will  inevitably  follow  the  footsteps  of  Egypt  and 
bring  her  people  to  the  brink  of  ruin  and  bankruptcy. 
Which  road  will  China  take?  May  her  responsible  lead- 
ers select  the  right  path  ! 

Finally,  the  advent  of  the  New  Consortium  brings 
into  being  a  great  issue  in  the  politics  of  the  Far  East, 
which  will  be  the  burning  problem  of  the  next  decade 
or  so.  That  is  the  control  of  China.  On  the  one  hand, 
if  China  should  fail  in  her  loan  obligations,  the  Powers, 
through  the  agency  of  the  New  Consortium,  are  bound 
to  impose  international  control.  On  the  other,  Chinese 
nationalism,  awakened  to  the  seriousness  of  the  situa- 
tion, and  having  manifested  itself  so  effectively  and  so 
nobly  in  the  Chinese  Revolution  of  1911  and  the  Stu- 
dents' Strike  and  Economic  Eoycott  of  1919,  would 
not  permit  their  inalienable  right  of  national  independ- 
ence to  be  mortgaged  or  extinguished,  but  would  enter 
upon  a  death  struggle  for  the  preservation  of  their  na- 
tional liberty  and  sovereignty.  Hence  it  is  reasonable  to 
believe  that  the  next  decade  or  so  may  witness  the  great 
struggle  of  the  Chinese  people  for  their  national  inde- 
pendence  as  against  the  control  of  Japan,  or  of  the  Pow- 
ers through   the   New   Consortium. 

NOTES  TO  CHAPTER  XXV 

1.  Documents  Concerning  the   New   Consortium,  released  to 
bj  the  Dept  of  State,  Mar.  30,  1921;  Far  Eastern  Review. 

March,  1921,  p, 

2.  T.  W.  Lamont,  Preliminary  Rep,  on  the  New  Consort  for 
China,  p.  6. 

3.  Documents  Concerning  the  New  Consortium,  op.  tit..  I < >int 

Sept  28,  1920. 

4.  Copy  furnished  thn  of  .1.  P.  Morgan  >S.  I 

5.  Documents,  op.  cit,  Joint  Note  of  American,  Bnti  h,  French 
and  Jaj  inese  1/    iti  n     .it   Peking   to  <  bine  e   Foreign  Office. 

Jan.  13,  1921. 


XXVI 

THE  LEAGUE  OF  NATIONS  AND  CHINA 

Another  event  that  has  affected,  or  is  going  to  affect, 
the  foreign  relations  of  China,  is  the  League  of  Nations. 
In  this  treatise,  we  do  not  propose  to  deal  with  the  or- 
ganization, operation,  or  efficacy  of  the  League  as  it  is, 
which  falls  beyond  the  scope  of  this  work,  but  we  do 
aim,  rather,  to  treat  of  the  effects  it  has  upon  the  for- 
eign relations  of  China  and  of  the  rights  and  duties 
which  she  has  incurred  by  virtue  of  her  membership 
therein. 

Before  the  advent  of  the  League,  there  was  no  guar- 
antee or  protection  for  the  territorial  integrity  and  po- 
litical independence  of  any  nation.  To  maintain  its  na- 
tional existence,  every  nation  was  obliged  to  depend 
upon  its  own  armament  or  upon  the  help  of  its  allies. 
In  other  words,  the  rights  of  territorial  integrity  and 
political  independence  were  not  secured  by  any  other 
means  than  the  armament  of  the  nations  themselves 
and  the  arbitrament  of  war.  Stated  in  another  way,  the 
nations,  for  want  of  adequate  remedy  furnished  by  the 
society  of  nations,  had  no  more  rights  of  sovereignty 
than  those  which  their  own  armament  and  other  resources 
could  maintain  and  those  which  the  other  states  were 
willing  or  forced  to  accord  to  one  another.  For  instance, 
after  China's  disastrous  defeat  of  1894-5  by  Japan,  the 
Powers  proceeded  to  her  and  seized  various  strategic 
bases.  In  the  eyes  of  the  Powers,  China  had 
no  more  rights  of  sovereignty  than  those  which 
her  own  armament  and  other  resources  could  de- 
fend and  those  which  the  Powers  accorded  to  her.  In 
short,  under  the  old  regime,  the  sovereign  rights  of  ter- 

416 


THE  LEAGUE  OE  NATIONS  AND  CHINA     417 

ritorial  integrity  and  political  independence  were  not  se- 
cured by  any  international  protection  or  guarantee,  and 
she    was    therefore    exposed    to    the    ill-treatment    and 

spoliation  of  the  stronger  Powers.  Thus,  the  old  regime 
was  the  rule  of  might,  and  not  of  right. 

The  new  order,  however,  as  inaugurated  by  the  League 
of  Nations,  furnishes  what  was  kicking  in  the  old  regime. 
no  matter  how  inadequate  and  how  impotent  it  may 
prove  to  he.  That  is,  it  provides  for  an  international 
guarantee  or  protection  of  the  sovereign  rights  of  ter- 
ritorial integrity  and  political  independence.  While  for- 
merly there  was  practically  no  court  of  appeal  for  the 
vindication  of  national  rights,  now  there  is  the  League 
which  requires  the  submission  of  all  disputes  among 
the  members  either  to  arbitration  or  to  inquiry  by  the 
Council  or  the  Assembly  of  the  League.  While  under 
the  old  regime  there  was  no  international  guarantee  or 
protection  for  national  rights  as  growing  out  of  sov- 
ereignty, in  the  new  order  there  are  the  sanctions  pro- 
I  in  the  League  Covenant  consisting  of  diplomatic 
severance,  economic  boycott,  international  force  upon 
the  recommendation  of  the  Council,  and  expulsion  from 
the  League  by  a  unanimous  vote  of  the  Council  and  As- 
sembly. Whereas  in  absence  of  a  league  each  nation 
had  no  other  alternative  than  either  to  fight  or  to  sub- 
mit, in  case  of  an  ultimatum  or  actual  invasion,  as  shown 
in  the  case  of  Japan's  ultimatum  of  May  7,  1915,  now 
under  the  protection  of  the  League  a  member  SO  threat- 
ened ran  appeal  to  the  Council  or  Assembly,  or  submit 
to  arbitration,  in  which  cases,  if  the  recommendation 
of  the  Council  is  unanimous,  or  if  that  Of  the  Assembly 

is  concurred  in  by  the   representatives  of   the    Powers 

on    the    Council    and    a    majority    of    the    other    mem- 

tuding  in  each  ease  the  parties  to  the  dispute,  or 

if    the    award    of    the   arbitration    is    properly    made,    the 

party  so  threatened  ran  abide  by  the  award  or  recom- 
mendation and  thus  win  the  protection  of  the  League.1 


418      PROBLEMS  ARISING  SINCE  THE  WAR 

Thus,  however   inadequate,   a   remedy   is  provided   for 
the  rights  of  nations,  which  was  non-existent  under  the 
old  regime.     This  surely  is  a  step  forward  in  the  po- 
litical  evolution   of   mankind. 
With  this  provision  of  an  international  guarantee  or 

protection  for  national  rights,  China's  foreign  relations 
undergo  a  change  for  hetter.  Whereas  formerly  China 
could  not  appeal  to  any  tribunal  or  constituted  authority 
in  case  of  the  violation  of  her  rights,  but  had  either  to 
submit  or  fight,  she  can  now  call  for  arbitration,  or  ap- 
peal to  the  Council  or  the  Assembly  for  a  recomm 
tion ;  and  should  she  choose  to  abide  by  an  award  or 
recommendation  made  in  pursuance  of  the  provisions 
of  the  Covenant  of  the  League,  she  would  obtain  its 
protection  in  case  of  an  attack.  While  under  the  old 
regime  her  rights  of  territorial  integrity  and  political 
independence  were  insecure  except  as  her  own  arma- 
ment, or  jealousy  among  the  Powers,  or  their  friendly 
assistance  could  maintain  them,  her  territorial  info 
and  political  independence  are  now  assured  by  the 
League,  or  at  least  supposed  to  be  so  assured.  To  put 
it  concretely,  under  the  protection  of  the  League,  the 
threatened  partition  of  1900  is  not  likely  to  come  to  pass 
again,  nor  the  German  seizure  of  Kiaochow,  nor  the 
Japanese  ultimatum  of  May  7,  1915.  Herein  lies  a  great 
advance  in  the  foreign  relations  of  China  as  arising  out 
of   the  existence  of   the    League." 

Having  seen  the  improvement  in  China's   foreign  re- 
lations as  growing  out  of   the  existence  of   the    I.' 
and   her  membership   therein,   we   will    ue.\'  r  the 

rights  and  duties  she  has  acquired  as  a  member  of  the 
ue.  At  the  meeting  of  the  Assembly,  she  has  the 
right  to  cast  one  vote  and  to  have  no  more  than  three 
representatives  (Article-  3).  At  the  meeting  of  the 
Council,  by  virtue  of  her  recent  election  then 
has  the  right  to  cast  one  vote  and  to  send  one  represen- 


THE  LEAGUE  OF  NATIONS  AND  CHINA     419 

tative  (Article  4),  although  "any  member  of  the  League 
not  represented  on  the  Council  shall  be  invited  to  send  a 
representative  to  sit  as  a  member  at  any  meeting  of  the 
Council  during  the  consideration  of  matters  specially 
affecting  the  interests  of  that  member  of  the  League" 
(Article  4).  As  a  friendly  right  of  each  member  of  the 
League,  she  can  "bring  to  the  attention  of  the  Assembly 
or  of  the  Council  any  circumstance  whatever  affecting 
international  relations  which  threatens  to  disturb  in- 
ternational peace  or  the  good  understanding  between  na- 
tions upon  which  peace  depends"  (Article  NI).-U  She 
has  also  the  right  to  withdraw  from  the  League,  after 
two  years'  notice,  "provided  that  all  its  international 
obligations  and  all  its  obligations  under  this  Covenant 
shall  have  been  fulfilled  at  the  time  of  its  withdrawal" 
(Article  I)  ;  and  to  refuse  to  be  bound  by  any  amend- 
ment, in  which  case  she  ceases  to  be  a  member  of  the 
League   (Article  26). 

What  is  more  important,  she  can  appeal  to  the  Council 
for  inquiry  and  recommendation,  in  case  of  any  dispute, 
or  submit  to  arbitration. 


"The  Members  of  the  League  agree  that  if  there  should 
arise  between  them  any  dispute  likely  to  lead  to  a  rup- 
ture, they  will  submit  the  matter  either  to  arbitration 
or  to  inquiry  by  the  Council,  and  they  agree  in  no  case 
sort  to  war  until  three  months  after  the  award  by 
the  arbitrators  or  the  report  by  tin-  Council. 

In  any  case  under  this  Article  the  award  of  the  arbi- 
trators shall  he  made  within  a  reasonable  time,  and  the 
report   of   the   Council   Shall   he   made   within   six   months 

after  the  submission  of  tin-  dispute"  (Article   12). 

In  "disputes  as  to  the  interpretation  of  a  treaty,  a-  to 
any  question  of  international  law,  as  to  the  existent 
any  fact  which  if  established  should  constitute  a  breach 

of  any   international  obligation,  Or  as  to  the  extent  and 


420      PROBLEMS  ARISING  SINCE  THE  WAR 

nature  of  the  reparation  to  be  made  for  any  such 
breach"  (Article  13),  which  are  declared  to  be  generally 
appropriate  for  submission  to  arbitration,  she  can,  with 
the  consent  of  the  other  party  or  parties  to  the  dispute, 
submit  the  matter  to  arbitration,  and  if  she  abides  by 
the  award,  gains  the  protection  of  the  League  (Article 
13).  In  disputes  likely  to  lead  to  a  rupture,  and  which 
are  not  submitted  to  arbitration,  she  can  submit  the  mat- 
ter to  the  Council  by  giving  notice  to  the  Secretary 
General.  "If  a  report  by  the  Council'  is  unanimously 
agreed  to  by  the  members  thereof  other  than  the  Repre- 
sentatives of  the  one  or  more  of  the  parties  to  dispute, 
the  Members  of  the  League  agree  that  they  will  not  go 
to  war  with  any  party  to  the  dispute,  which  complies 
with  the  recommendations  of  the  report."  This  means 
that  in  case  of  a  unanimous  report  by  the  Council  ex- 
cepting the  parties  to  the  dispute,  she  gains  the  protec- 
tion of  the  League  by  compliance  with  the  report  or 
recommendation.  If,  however,  the  Council  fails  to 
render  a  unanimous  report,  then  she  can  adopt  what 
measures  she  pleases  "for  the  maintenance  of  right  and 
justice,"  which  is  tantamount  to  saying  that  she  can 
make  war,  if  she  deems  it  tit  and  desirable.  On  the  other 
hand,  she  can  ask  the  Council  to  refer  the  matter  to  the 
Assembly  if  she  does  so  within  fourteen  days  after  the 
submission  of  the  dispute,  in  which  case  a  report  of  all 
"the  representatives  of  the  Members  of  the  League  rep- 
resented on  the  Council  and  of  a  majority  of  the  other 
members  of  the  League,  exclusive  in  each  case  of  the 
representatives  of  the  parties  to  the  dispute,  shall  have 
the  same  force  as  a  report  by  the  Council  concurred  in 
by  all  the  members  thereof  other  than  the  representa- 
tives of  one  or  more  of  the  parties  to  the  dispute" 
(Article  15). 

Finally,  and  what  is  equally  as  important  as  the  right 
of  appeal,  she  has  the  right  of  territorial  integrity  and 
political    independence  as  guaranteed  by   Article    10: 


THE  LEAGUE  OF  NATIONS  AND  CHINA     421 

"The  Members  of  the  League  undertake  to  respect  and 
preserve  as  against  external  aggression  the  territorial 
integrity  and  existing  political  independence  of  all  Mem- 
bers of  the  League.  In  case  of  any  such  aggression  or 
in  case  of  any  threat  or  danger  of  such  aggression  the 
Council  shall  advise  upon  the  means  by  which  this  obli- 
gation shall  be  fulfilled." 

As  Wilson  remarked,  this  is  the  heart  of  the  Cove- 
nant. "Article  10  seems  to  me  to  constitute  the  very 
backbone  of  the  whole  Covenant.  Without  it  the 
League  would  be  hardly  more  than  an  influential  debat- 
ing society."  3 

On  the  other  hand,  since  rights  and  duties  are  cor- 
relatives, in  acquiring  these  rights,  she  also  incurs  cor- 
responding duties.  By  subscribing  to  the  Preamble  of 
the  League  which   runs : 

"in  order  to  promote  international  cooperation  and  to 
achieve  international  peace  and  security  by  the  accept- 
ance of  obligations  not  to  resort  to  war,  by  the  prescrip- 
tion of  open,  just  and  honorable  relations  between  na- 
tions, by  the  firm  establishment  of  the  understand- 
ings of  international  law  as  the  actual  rule  of  conduct 
among  governments,  and  by  the  maintenance  of  justice 
and  a  scrupulous  respect  for  all  treaty  obligations  in  the 
dealings  of  organized  peoples  with  one  another,  the  High 
Contracting  Parties  agreed  to  this  Covenant  of  the 
League   of    Nations." 

she  places  herself  under  obligation  to  observe,  as  far  as 
feasible,  the  four  ideals  or  methods  of  promoting  inter- 
national  cooperation   and    peace,   namely: 

1.  By  the  acceptance  of  obligations  not  to  resort  to 
war ; 

2.  By  the  prescription  of  open,  just  and  honorable 

relations ; 


422      PROBLEMS  ARISING  SINCE  THE  WAR 

3.  By  the  firm  establishment  of  the  understandings 
of  international  law  as  the  actual  rule  of  conduct 
among  Governments,  and 

4.  By  the-  maintenance  of  justice  and  a  scrupulous 
respect  for  all  treaty  obligations  in  the  dealin 
organized  peoples  with  one  another. 


She  also  obligates  herself  to  perform  the  necessary 
duties  connected  with  the  humanitarian  tasks  connected 
with  tabor  legislation,  colonial  administration,  traffic  in 
women,  children,  opium  and  other  dangerous  drugs,  free- 
dom of  communication  and  equitable  treatment  in  inter- 
national commerce,  prevention  of  disease,  and  Red 
Cross.3A 

She  further  engages  to  bear  the  expenses  of  the  Sec- 
retariat "in  accordance  with  the  apportionment  of  the 
expenses  of  the  International  Bureau  of  the  Universal 
Postal  Union"  (Art.  6),  which  may  include  the  ex- 
penses of  any  bureau  or  commission  placed  under  the 
direction  of  the  League  (Art.  24).  Without  the  con- 
currence of  the  Council,  she  is  also  not  to  exceed  the 
limit  of  armament  as  recommended  by  the  Council  after 
she  has  adopted  the  recommendation.  She  is  to  inter- 
change full  and  frank  information  as  to  the  scale  of  her 
armaments,  her  military,  naval,  and  air  programs 
and  the  condition  of  such  of  her  industries  as  are  adapt- 
able to  war-like  purposes  (Art.  8).  Should  she  be- 
come a  mandatory  for  any  colony  she  "shall  render  to 
the  Council  an  annual  report  in  reference  to  the  terri- 
tory committed  to  its  charge"  (Art.  22),  besides  ob- 
serving the  requirements  as  set  forth  in  the  mandate 

Respecting  treaties,  she  must  register  every  treaty  or 
international  engagement  with  the  secretariat,  and  cause 
it  io  he  published  by  the  League  as  soon  as  possible,  no 
treaty  or  international  engagement  being  binding  until 
so  registered  (Art.  18).  '1  his  means  that  she  cannot 
enter  into  any  secret  treaties  or  alliances,  hut  must  pre- 


THE  LEAGUE  OF  NATIONS  AND  CHINA     423 

scribe  "open,  just  and  honorable  relations  between  na- 
tions." She  further  pledges  not  to  conclude  any  treaty 
or  agreement  inconsistent  with  the  terms  of  the  League 
Covenant,  and  in  case  she  has  assumed  obligations  in- 
consistent therewith,  she  will  take  steps  to  obtain  the 
necessary  release  therefrom.     Article  20  reads : 

''The  Members  of  the  League  severally  agree  that  this 
Covenant  is  accepted  as  abrogating  all  obligations  or  un- 
derstandings inter  se  which  are  inconsistent  with  the 
terms  thereof,  and  solemnly  undertake  that  they  will  not 
hereafter  enter  into  any  engagements  inconsistent  with 
the  terms  thereof.  In  case  any  Member  of  the  League 
shall,  before  becoming  a  Member  of  the  League,  have 
undertaken  any  obligations  inconsistent  with  the  terms 
of  this  Covenant,  it  shall  be  the  duty  of  such  Member 
to  take  immediate  steps  to  procure  its  release  from  such 
obligations." 

Thus,  by  assuming  this  obligation,  she  recognizes  the 
supremacy  of  the  League  Covenant,  which  is  to  govern 
all  past,  existing,  and  future  treaties  and  international 
engagements. 

In  regard  to  the  sanctions  as  provided  in  the  Cove- 
nant, China  obligates  herself  to  participate  in  and  con- 
tribute her  share  in  the  enforcement  and  application  of 
these  sanctions.  She  is  to  resort  to  diplomatic  severance 
and  economic  boycott  against  the  covenant-breaking 
state.  She  is  to  contribute  her  quota  of  the  interna- 
tional force  recommended  by  tin-  Council.  Sin-  is  t<» 
render  mutual  assistance  in  economic  an<l  financial 
ares,  to  resist  any  special  measures  aimed  at  any 
one  of  their  number  by  the  covenant-breaking  state,  and 
n>  allow   •  of   troops  to  tin-  cooperating    i 

Article  16  dealing  with  the  sanctions.)!  the  League  read-: 

"Should  any  Member  "i  tin-  League  resort  to  war  in 
disregard  of  its  covenants  under  Articles   XII.   XIII   or 


424      PR(  >BLEMS  ARISING  SINCE  THE  WAR 

XV,  it  shall  ipso  facto  be  deemed  to  have  committed  an 
act  of  war  against  all  other  members  of  the  League, 
which  hereby  undertake  immediately  to  subject  it  to  the 
severance  01  all  trade  or  financial  relations,  the  prohibi- 
tion of  all  intercourse  between  their  nationals  and  the 
nationals  of  the  covenant-breaking  State,  and  the  pre- 
vention of  all  financial,  commercial,  or  personal  inter- 
•  between  the  nationals  of  the  covenant-breaking 
State-;  and  the  nationals  of  any  other  State,  whether  a 
Member  of  the   League  or  not. 

"It  shall  be  the  duty  of  the  Council  in  such  case  to 
recommend  to  the  several  Governments  concerned  what 
effective  military  or  naval  force  the  Members  of  the 
League  shall  severally  contribute  to  the  armed  forces  to 
be  used  to  protect  the  covenants  of  the  League. 

"The  members  of  the  League  agreed,  further,  that 
they  will  mutually  support  one  another  in  the  financial 
and  economic  measures  which  are  taken  under  this  Ar- 
ticle, in  order  to  minimize  the  loss  and  inconvenience 
resulting  from  the  above  measures,  and  that  they  will 
mutually  support  one  another  in  resisting  any  special 
measures  aimed  at  one  of  their  number  by  the  covenant- 
breaking  State,  and  that  they  will  take  the  necessary 
steps  to  afford  passage  through  their  territory  to  the 
forces  of  any  of  the  Members  of  the  League  which  are 
cooperating  to  protect  the  covenants  of  the  League. 

"Any  Member  of  the  League  which  has  violated  any 
covenant  of  the  I  .caguc  may  be  declared  to  be  no  longer 
a  Member  of  the  League  by  a  vote  of  the  Council  con- 
curred in  by  the  representatives  of  all  other  Members." 

While  China  enjoys  these  rights  and  duties  acquired 
through  her  membership  in  the  League,  her  territorial 
integrity  and  political  independence  are,  by  no  means, 
under  an  absolute,  or  even  effective,  guarantee  of  the 
League.  In  accordance  with  Wilson's  interpretation, 
Article  10  entails  no  other  than  moral  obligations  on  the 
part  of  the  member  states.  Whatever  the  recommenda- 
tion of  the  Council  may  lie,  the  state  concerned  can  still 
decide  its  own  course  of  action.     "The  council  of  the 


THE  LEAGUE  OF  NATIONS  AND  CHINA     425 

League  can  only  'advise  upon'  the  means  by  which  the 
obligations  of  that  great  article  are  to  be  given  effect  to. 
Unless  the  United  States  is  a  party  to  the  policy  or  action 
in  question,  her  own  affirmative  vote  in  the  Council  is 
necessary  before  any  advice  can  be  given,  .  .  .  The 
United  States  will,  indeed,  undertake  under  Article  10 
to  respect  and  preserve  against  external  aggression  the 
territorial  integrity  and  existing  political  independence 
of  all  members  of  the  League,  and  that  engagement  con- 
stitutes a  very  grave  and  solemn  moral  obligation.  But 
it  is  a  moral,  not  a  legal,  obligation,  and  leaves  our  con- 
gress absolutely  free  to  put  its  own  interpretation  upon 
it  in  all  cases  that  call  for  action.  It  is  binding  in  con- 
science only,  not  in  law."  4 

Hence,  whatever  protection  or  guarantee  of  territorial 
integrity  and  political  independence  China  may  obtain 
from  the  League  must  necessarily  proceed  out  of  the 
willing  cooperation  and  good  will  of  its  Members. 
Meanwhile,  she  must  be  prepared  to  resist  sudden  inva- 
sions, as  shown  in  the  recent  Russian  invasion  of  Urga, 
the  League  having  no  instrument  ready  for  action  in 
such  an  emergency.  She  must  also  be  prepared  for  war, 
in  case  the  recommendation  of  the  Council  is  not  unan- 
imous, or  in  case  the  report  of  the  assembly  is  not 
concurred  in  by  the  representatives  of  all  the  members 
of  the  League  represented  on  the  Council  and  a  majority 
of  the  other  members  exclusive  in  each  case  of  the  rep- 
resentatives of  the  party  or  parties  to  the  dispute,  tor,  in 
such  cases,  the  League  does  not  forbid  war.  but  simply 
delays  war  for  the  duration  of  the  time  covering  the 
consideration  by  the  Council  or  Assembly  within  six 
months  and  three  months  after  the  delivery  of  the  re- 
port or  recommendation.  It  will,  therefore,  be  a 
mistake  on  the  part  of  China  to  di  card  her  armament 
or  even  to  neglecl  it.  trusting  in  the  efficacy  of  the 
ue.  It  should  rather  be  her  duty  to  he  fully  pre- 
pared for  war,  just  ;i>  if  there  wnv  im   League  in  exist- 


426      PRI  IBLEMS  ARISING  SINCE  THE  WAR 

ence,  bending,  however,  her  efforts  henceforth  to  inter- 
national peace  and  devoting  her  military  and  naval  forces 
to  the  maintenance  of  the  principles  of  the  League. 


NOTES  TO  CHAPTER  XXVI 

1.  For  the  Covenant  of  the  League  of  Nations,  see  Hearings 
before  the  Committee  on  Foreign  Relations,  the  United  States 
Senate,  Sixty-sixth  Congress,  Firsl  Session,  Senate  Document 
No.  1<X),  on  Treaty  of  Peace  with  Germany,  pp.  270-276;  Treaty 
of  Peace  with  Germany,  published  by  the  American  Association 
for  International  Conciliation,  Sept.,  1919,  No.  14_',  pp.  939-959; 
also  American  Journal  of  Int.  Law,  Jan.,  1921,  Official  Docu- 
ments, p.  4  et  seq. ;  also  Supp.  of  the  Amer.  Journal  of  Int.  Law, 
July.  1919,  p.  157  et  seq. 

2.  Cf.  Hearings,  Conference  at  White  House,  Aug.  19,  1919, 
p.  552.  Wilson's  testimony  before  the  Committee  regarding  the 
possible  effect  of  the  League  on  China. 

2A.  China  was  elected  to  the  Council  of  the  League  on  Dec. 
15,  1920.  The  election  is  for  ore  year  only,  subject  to  reelection. 
— See  New  York  Times,  Dec.  16,  1920. 

2B.    Also  see  Article  XIX. 

3.  lb  arings,  ibid.,  p.  504. 
3A.    Sir  Articles  23  and  25. 

4.  Hearings,  ibid.,  p.  504. 


XXVI] 

THE  SHANTUNG  QUESTION 

The  Shantung  Question  has  become  a  world  prob- 
lem.  Like  the  Alsace-Lorraine  controversy,  which  has 
been  settled  by  the  World  War,  it  carries  the  potential 

germ  of  another  world  conflict.  As  the  facts  of  this 
question  are  well  known,  we  shall  not  attempt  to  reiterate 
them,  hut  confine  ourselves  to  an  analysis  of  the  problem 
with  a  view  to  reaching  a  solution,  just  and  equitable  to 
China  and  Japan. 

To  refresh  the  memory,  we  will  recall  that  shortly 
after  the  outbreak  of  the  World  War,  China 
her  neutrality  by  a  Presidential  Mandate,  dated  August 
6,  1914.  On  August  15,  1914,  Japan  presented  an  ulti- 
matum to  Germany  advising  unconditional  surrender  of 
the  leased  territory  on  or  before  September  15,  "with  a 
view  to  eventual  restoration  of  the  same  to  China,"  and 
also  advising  the  immediate  withdrawal  or  disarmament 
of  all  belligerent  vessels  within  the  Chinese  and  Japa- 
nese waters,  asking  for  a  reply  by  noon  of  August  23.1 
Failing  to  receive  a  reply  at  the  appointed  time,  she  de- 
clared war  on  Germany  and  proceeded  to  attack  the  Ger- 
man leasehold  of  Kiaochow.     Meanwhile  China  did  not 

.  ain4    either   the   ultimatum   or   tin-  attack',   but 

on    the    contrary    intimated    her    intention    to  participate 

in  the  campaign,  which,  however,  wa  ived  with 
favor. 

During  the  campaign   (on  September  3,  1914)  Japan 

landed  her  troop:    at    l.r.n  kow,  Shantung,   outside  the 

1  territory.    On  the  same  daw  China  proclaimed  a 

war  /.one  delimiting  the  belligerent  ana  t « »  approximately 

one  hundred  miles  west  of  Tsingtao,  including  Kiaochow 

4-7 


428      PROBLEMS  ARISING  SINCE  THE  WAR 

and  Laichow,  but  excluding  Weihsien  and  Tsinan.  On 
September  26,  1914,  the  Japanese  troops,  marching  from 
Lungkow  to  Wejhsien,  captured  the  railway  station  there 
belonging  to  the  Tsingtao-Tsinan  Railway,  and  on  Oc- 
tober 6,  1{,14,  st-izcd  the  railway  station  at  Tsinan,  the 
capital  of  Shantung.  Soon  they  took  possession  of  the 
entire  line  of  the  Tsingtao-Tsinan  Railway,  displacing 
its  employees  and  substituting  Japanese  subjects.  In 
addition  they  also  seized  the  German  mines  adjoining  the 
railway.  Meanwhile  the  siege  of  Tsingtao  proceeded  and 
on  November  7,  1914,  the  stronghold  was  captured. 

Thereafter,  on  January  18,  1915,  Japan  presented  the 
now  celebrated  Twenty-one  Demands,  among  which  was 
the  provision  (Group  I,  Article  1)  : 

"The  Chinese  Government  engages  to  give  full  assent 
to  all  matters  upon  which  the  Japanese  Government  may 
hereafter  agree  with  the  German  Government  relating 
to  the  disposition  of  all  rights,  interests  and  concessions, 
which  Germany,  by  virtue  of  treaties  or  otherwise,  pos- 
sesses in  relation  to  the  province  of  Shantung."  - 

On  May  7,  1915,  Japan  presented  an  ultimatum,  be- 
cause of  which  China  yielded.  In  consequence,  the 
treaties  of  May  25,  1915.  were  signed,  one  relating  to 
Shantung  with  three  exchanges  of  notes,  the  other  to 
South  Manchuria  and  Eastern  Inner  Mongolia  with  nine 
sets  of  exchange  of  notes. 

In  return  Japan  pledged  to  restore  the  leased  territory 
of  Kiaochow,  in  an  exchange  of  notes,  May  25,  1915: 

"When,  after  the  termination  of  the  present   war,  the 

d  territory  of  Kiaochow   Bay  is  completely  left  to 

the  free  disposal  of  Japan,  the  Japanese  Government  will 

restore  the  said  leased  territory  to  China  under  the  fol- 
lowing  conditions: 

"1.  The  whole  of  Kiaochow  Ray  to  be  opened  as  a 
commercial  port. 

"2.     A  concession  under  the  exclusive  jurisdiction  of 


THE  SHANTUNG  QUESTION  429 

Japan  to  be  established  at  a  place  designated  by  the  Japa- 
nese Government. 

"3.  If  the  foreign  Powers  desire  it,  an  international 
concession  may  be  established. 

"4.  As  regards  the  disposal  to  be  made  of  the  build- 
ings and  properties  of  Germany  and  the  conditions  and 
procedure  relating  thereto,  the  Japanese  Government  and 
the  Chinese  Government  shall  arrange  the  matter  by 
mutual  agreement  before  the  restoration."  3 

Then,  on  March  14,  1917,  China  severed  diplomatic 
relations  with  Germany,  and  on  August  14,  1915,  de- 
clared war  on  Germany  and  Austria-Hungary,  abrogating 
all  treaties,  agreements,  and  conventions  she  had  had  with 
the  Central  Powers,  to  the  effect  that 

"all  the  treaties  of  whatever  nature  between  China  and 
Germany  as  well  as  Austria-Hungary  are  abrogated,  as 
also  all  such  provisions  of  the  Protocol  of  September  7, 
1901,  and  other  similar  international  agreements  in  so 
far  as  they  concern  China  and  Germany  as  well  as 
Austria-I  Iungary."  * 

This  was  duly  taken  notice  of  by  the  legations  addressed, 
including  that  of  Japan. 

On  September  24,  1918,  in  an  exchange  of  notes  be- 
tween the  Chinese  Minister  at  Tokio  and  the  Japanese 
Minister  for  Foreign  Affairs,  respecting  adjustment  of 
questions  concerning  Shantung,  it  was  agreed  that 
(Art.  6)  "the  Kiaochow-Chinan  Railway,  after  its  own- 
ership is  definitely  determined,  is  to  be  made  a  Chino- 
Japanese  joint  enterprise." 

At  the  Paris  Peace  Conference  <>f  1919,  both  China 
and  Japan  contended  for  the  former  German  rights  in 
Shantung.  On  April  30,  191'',  the  Council  of  Three 
rendered  the  decision  in  favor  of  Japan,  which  was  in- 
corporated in  Articles  156,  157,  158,  of  the  Treaty  of 
Peace  with  Germain-,  signed  at  Versailles  nn  |uii'  28, 
1919. 


430      PROBLEMS  ARISING  SINCE  THE  WAR 

The  question,  as  stated  above,  turns  on  these  issues: 

1.  Whether  Japan  has  the  right 

( 1  >  To  attack  the  leased  territory  of  Kiaochow; 

(2)  To   land   her  troops   at    Lungkow   and   then 
inarch  through  Chinese  territory;  and 

(3)  To  sei/e  the  Kiaochow-Chinan  Railway  and 
the  adjoining  mines. 

2.  Whether  China's  Declaration  of  War  abrogates  all 
treaties,  conventions  and  agreements  with  Germany 
and  China  thus  recovers  the  German  concessions  in 
Shantung. 

3.  Whether  Japan's  possession  of  German  rights  in 
Shantung  is  validated  by 

(1)  The  Treaty  of  May  25,  1915,  and 

(2)  The  Agreement  of  September  24,  1918. 

As  to  whether  Japan  had  the  right  to  attack  the  leased 
territory  of  Kiaochow,  there  seems  to  be  an  honest  dif- 
ference of  opinion.  On  the  one  hand,  China  claims  that, 
inasmuch  as  she  reserved  her  sovereignty  over  the  leased 
territory  in  Article  1  of  the  Lease  Convention,6  she  can 
assert  the  neutrality  of  the  leased  territory  in  time  of 
a  war  in  which  the  lessee  state  is  involved.  In  other 
words,  arising  from  the  reservation  of  sovereignty,  she 
(hems  the  leased  territory  as  neutral,  and  not  subject  to 
the  hostile  operation  of  belligerents.  Further,  even  in 
case  an  attack  should  have  become  necessary  to  abate  a 
nuisance  or  to  remove  a  menace,  she  contends  that  her 
previous  consent  should  have  been  obtained  before  the 
attack  could  be  legitimate. 

On  the  other  hand,  Japan  claims  that,  basing  her  ac- 
tion on  the  precedent  of  Tort  Arthur  and  Talienwan, 
which  leased  territories  she  took  from  Russia  in  the  war 
of  1904-5,  the  leased  territories  are  not  neutral,  but  sub- 
ject to  the  hostile  operations  of  belligerents.  The  grant 
of  the  right  of  fortification,  she  contends,  and  the  sur- 
render of  the  right  of  administration,  during  the  term 


THE  SHANTUNG  QUESTION  431 

of  the  lease,  all  indicate  that  these  territories  are  proper 
objects  of  attack.  She  further  maintains  that,  granted 
she  had  no  right  to  attack  the  territory,  she  had  notified 
the  Chinese  Government  before  the  attack,  and  that  the 
Chinese  Government  did  not  make  any  strenuous  objec- 
tion, nor  lodge  any  protest,  but,  on  the  contrary,  requested 
participation  in  the  attack,  which,  though  rejected,  could 
be  taken  as  tantamount  to  tacit  consent.7 

As  to  whether  Japan  had  the  right  to  land  at  Lungkow 
and  march  through  the  Chinese  territory,  it  is  quite  safe 
to  say  that  Japan  had  no  such  right,  but,  on  the  con- 
trary, exceeded  the  limit  of  her  rights  and  violated  the 
neutrality  of  China.  China  having  declared  her  neu- 
trality by  the  Presidential  Mandate  of  August  6,  1914,8 
Japan  was  under  obligation  to  respect  her  neutrality. 
She  had  no  more  right  to  move  her  troops  and  supplies 
through  the  neutral  territory  of  China  than  Germany  had, 
in  1914,  to  cross  the  neutral  territory  of  Belgium  in  order 
to  attack  France.  "It  is  a  principle  of  the  law  of  nations 
that  no  belligerent  can  rightfully  make  use  of  the  terri- 
tory of  a  neutral  state  for  belligerent  purposes,  without 
the  consent  of  the  neutral  Government."  ° 

It  has  been  contended  by  Japan  that  military  necessity 
justified  the  violation,  inasmuch  as  she  could  attack 
KiaocliMW  more  easily  from  the  rear  than  from  the  front 
or  side.  This  argument,  however,  does  not  seem  to  stand 
the  test  of  analysis.  In  the  first  place,  there  was  no 
military  necessity  calling  for  such  a  violation  of  China's 
neutrality.  Japan  could  have  attacked  Tsingtao  just  as 
well  by  landing  within  the  leased  territory  of  Kiaochow 
as  by  way  of  Lungkow,  if  not  better.  This -was  borne 
out  by  the  action  of  the  British,  who,  in  due  respect  of 

China's  neutrality,  landed  at    Laoshan  on   September  23, 

and  because  of  tin-  distance  from  Laoshan  to  Tsingtao 
being  less  than  from  Lungkow  to  Tsingtao  and  fewer 

natural  obstacles  in  tin-  way,  tiny  reached  the  M-ene  of 
action  in  time  to  participate  in  the  first  encounter  with 


432      PROBLEMS  ARISING  SINCE  THE  WAR 

the  Germans.10  This  action  on  the  part  of  the  British 
clearly  proved  that  there  was  no  such  military  necessity, 
and  this  alone,  in  glaring  contrast  with  Japan's  action, 
is  sufficient  to  establish  the  guilt  of  Japan. 

Granting  for  argument's  sake  that  there  was  the  mili- 
tary necessity,  this  still  did  not  justify  Japan's  violation 
of  China's  neutrality.  Germany  pleaded  the  guilt  of  her 
own  violation  of  Belgian  neutrality  on  the  ground  of 
military  necessity.  But  the  world  did  not  condone  Ger- 
many's crime  on  that  account.  If  the  violation  of  Bel- 
gian neutrality  is  unjustifiable,  as  the  verdict  of  man- 
kind and  the  late  World  War  have  held  it  to  be  so,  Japan's 
violation  of  China's  neutrality  by  landing  in  Lungkow  is 
equally  unjustifiable,  even  more  so,  because  of  the  ab- 
sence of  any  ground  of  military  necessity. 

Perhaps  it  may  be  argued  that  China's  proclamation 
of  the  war  zone,  on  the  day  of  Japan's  landing  at  Lung- 
kow, seemed  to  give  her  implied  consent  and  hence  justi- 
fied Japan's  action.  It  must  be  understood,  however, 
that  in  proclaiming  the  war  zone,  China  did  not  thereby 
condone  Japan's  action,  but  rather  aimed  simply  to  pro- 
tect herself  from  any  consequences  resulting  from  the 
actions  of  belligerents  within  her  territory,  so  that  she 
could  be  free  from  any  charges  of  negligence  as  a 
neutral.  In  fact,  in  the  difficult  and  embarrassing  situa- 
tion, the  proclamation  of  a  war  zone  was  probably 
the  only  course  of  action  for  her  to  pursue.  For  China 
to  resist  Japan  at  Lungkow,  in  the  face  of  force 
majeure,  would  have  meant  war,  which  would  be 
contrary  to  the  spirit  of  the  law  of  neutrality.  On 
the  other  hand,  for  China  to  remain  silent  would 
have  been  equally  inexpedient,  since  Germany  could 
then  have  claimed  damage  for  injuries  due  to  negli- 
gence on  the  part  of  China  to  preserve  her  neutrality. 
Confronted  with  such  a  dilemma,  China  was  therefore 
constrained  to  proclaim  the  war  zone,  not  to  extenuate 
Japan   but   rather  to  protect   her  own   position  of   neu- 


THE  SHANTUNG  QUESTION  433 

trality.  It  is  therefore  plain  that,  notwithstanding  the 
proclamation  of  the  war  zone,  Japan's  landing  at  Lung- 
kow  remains  a  gross  violation  of  China's  neutrality. 

Respecting  Japan's  right  to  seize  the  Kiaochow-Chinari 
Railway  and  the  adjoining  mines,  it  is  again  evident  that 
Japan  had  no  such  right.  On  the  contrary,  she  did  so 
in  violation  of  China's  neutrality.  The  railway  and 
mines  in  question  were  situated  within  Chinese  terri- 
tory, outside  the  leased  territory  of  Kiaochow.  and  hence 
were  under  the  protection  of  the  Chinese  authorities.  No 
matter  whether  they  were  the  public  or  private  property 
of  Germans,  the  fact  that  they  lay  within  the  Chinese 
territory  was  sufficient  to  clothe  them  with  the  protec- 
tion of  China's  neutrality,  and  to  exempt  them  from 
seizure  by  any  belligerent  whatsoever. 

In  fact,  Japan  perpetrated  the  seizure  in  spite  of  the 
repeated  protests  of  the  Chinese  Government  and  thus 
knowingly  violated  China's  neutrality.  As  the  war  zone 
delimited  belligerent  activities  to  the  east  of  Weihsien 
or  within  one  hundred  miles  west  of  Tsingtao,  and  as, 
on  September  26,  the  Japanese  troops  proceeded  to  Weih- 
sien and  occupied  the  railway  station,  the  Chinese  Gov- 
ernment protested  on  the  next  day,  that  is,  September  27, 
1914,  as  follows: 

"On  the  7th  of  September  a  dispatch  received  from 
your  Government  stated  that  your  Government  under- 
stood, with  some  difficulty,  what  our  Government  meant 

in  that  declaration.    This  .Ministry  (the  Chinese  Foreign 

Office)  further  declared  that  the  railroad  from  Weihsien 
to  Chilian  should  be  under  Chinese  protection,  and 
through  Your  Excellency  we  requested  your  Government 
to  issue  an  order  prohibiting  your  troops  from  advancing 
to  Weihsien,  or  any  place  wesl  of  Weihsien.  But  now 
the  troops  of  your  Government  have  forced  their  way 
into  Weihsien  and  taken  possession  of  the  railway.  Con- 
sidering that  the  railway  belongs  to  a  Sino  ( ierman 
corporation,  thai  all  the  railway  stations  have  also  been 
under  Chinese  protection,  and  in  none  of  them  has  there 


434      PROBLEMS  ARISING  SINCE  THE  WAR 

ever  been  any  German  troop,  and  that  V.  is  in 

urely  neutral  territory,  the  acts  committed  by  the 
troops  of  your  country  are  manifestly  contrary  to  the 
declaration  and  in  violation  of  China's  neutrality."  u 

Following  this  protest,  on  thi  '  iy,  September  28, 

1914,    the   Japanese    Minister   at    Peking   called   at   the 

Chinese  Ministry  of  Foreign  Affairs,  and.  to  the  surprise 
and  indignation  of  the  Chinese  Government,  informed  the 
latter  that,   because  of   military   necessity,   the   Jap 
troops  would  mov-  rd  from  Weihsien  and  occupy 

the  whole  line.     In  consequence  of  this,  on   September 
30,  1914,  the  Chinese  Government  again  protested: 

"It  is  a  settled  principle  that  even  the  public  property 
of  a  belligerent  while  on  a  neutral  territory,  cannot  be 
attacked,  or  taken  possession  of  by  the  other  billigerent, 
much  more  so  in  the  present  case  when  the  property  in 
question  is  jointly  owned  by  Chinese  and  German  capi- 
tis. ...  It  has  been  a  long  while  since  the  troops 
of  your  country  have  begun  to  attack  Tsihgtao,  and  the 
German  troops  in  Tsingtao  have  I  rendered 

helpless,  and  entirely  and  long  ago  cut  off  from  the  com- 
munication through  the  Kiaochow  Railway.  Not  only 
our  Government  will  never  allow  the  Germans  to  make 
use  of  the  line,  it  is  actually  beyond  their  power  to  make 
if  it.  Therefore  the  contemplated  action  of  your 
country  is  decidedly  not  a  case  of  military  neces 

In  response  to  these  repeated  protests,  the  Japanese 
Government  replied  on  October  2,  1914.  that  the  Ger- 
man Kiaochow-Chinan  Railway  was  of  the  same  nature 
and  character  as  the  leased  territory  and  that  the  pur- 
pose of  Japan's  attack  was  not  only  to  eliminate  the 
German  base  of  Kiaochow,  but  to  gain  the  control  and 
administration  of  the  railway  in  question.  Reiterating 
the  argument  of  military  necessity,  it  contended  that, 
lying  at  the  rear  of  the  leased  territory,  the  control  of 
the  railway  was  essential  to  the  safety  of  Japan  in 
Kiaochow  : 


THE  SHANTUNG  QUESTION  435 

"Regarding  the  Shantung  Railway,  ...  it  is  of  the 
same  character  as  the  leased  territory.  This  fact  is  be- 
yond dispute,  in  view  of  its  origin,  the  special  charter 
given  by  the  German  Government  and  the  way  in  which 
the  company  draws  its  funds.  .  .  . 

"Moreover,  a  railway  from  its  very  nature  positively 
cannot  he  treated  one  part  separately  from  the  other. 
Although  one  part  of  this  German-owned  railway  is 
situated  west  of  Weihsien,  it  cannot  be  held  as  having 
changed  its  character  on  the  ground  that  a  part  remains 
in  neutral  territory.  Besides,  the  aim  of  the  Imperial 
Government  is  not  only  to  overthrow  the  base  possessed 
by  the  enemy,  but  also  to  cause  the  control  and  admin- 
istration of  this  indivisible  railway  to  fall  into  our  posses- 
sion. 

"Although  the  Chinese  Government  holds  that  under 
the  present  condition  the  Shantung  Railway  cannot  be 
utilized  by  the  German  troops  in  view  of  its  severance 
with  Chilian,  yet  from  the  attacking  troops'  point  of  view, 
the  railway  being  immediately  behind  Tsingtao,  and  in 
view  of  the  present  situation,  it  is  a  serious  danger  to 
the  military  operation  to  leave  a  railway  by  the  enemy 
perfectly  free."  13 

It  can  be  seen,  from  these  extracts  from  the  official 
correspondence,  that  what  China  strove  for  was  the 
preservation  of  her  neutrality,  and  that  what  Japan  aimed 
at  was  not  only  the  leased  territory  of  Kiaochow,  but 
also  the  Kiaochow-Chinan  Railway  with  the  adjoining 
mines,  although  they  lay  within  Chinese  neutral  terri- 
tory. Such  faets  cannot  but  compel  a  reasonable  and 
impartial  mind  to  declare  that  Japan,  in  gaining  the 
control  of  the  Kiaochow-Chinan  Railway  and  the  adjoin- 
ing mines,  violated  the  neutrality  of  China. 

This  conclusion  is  all  the  more  convincing  and  ines- 
capable when  the  nil  the  inviolability  of 
neutral  territory,  as  summarized  by  John  Bassett  Moore, 
arc  taken  into  consideration:  M 


436      PROBLEMS  ARISING  SINCK  Till-;  WAR 

".  .  .  It  appears  (  1  )  that  the  commission  of  hostility 
against  another  on  neutral  territory  is  a  violation  of  the 

law  of  nations;  (2)  that  such  violation  involves  an  of- 
fense to  the  neutral  nation,  and  that  reparation  from  the 
offending  belligerent  is  due  to  that  nation  alone;  (3) 
that,  if  property  was  captured,  it  is  the  duty  of  the 
offending  belligerent  to  restore  it  on  the  demand  of  the 
neutral;  (4)  that  nations  have,  by  numerous  treaties, 
pledged  themselves  as  neutrals  and  to  use  'all  the  means 
in  their  power'  to  protect  or  effect  the  restitution  of  prop- 
erty in  such  cases;  but  (5)  that  the  manner  in  which 
this  obligation  must  be  discharged  was  not  ascertained 
by  any  express  rule  or  by  any  general  understanding." 

Applying  these  rules  to  Japan's  seizure  of  the  German 
Kiaochow-Chinan  Railway  and  the  adjoining  mines  lying 
within  the  Chinese  neutral  territory  outside  the  leased 
area,  it  is  clear  that  she  violated  China's  neutrality  and 
that,  in  consequence,  she  is  under  obligation,  upon  the 
demand  of  China,  to  restore  the  same. 

We  now  come  to  consider  whether  China's  declaration 
of  war  abrogates  all  the  treaties  of  whatever  nature,  thus 
legalizing  China's  recovery  of  Germany's  former  conces- 
sions in  Shantung.  The  writers  on  international  law  are 
not  agreed  as  to  whether  war  abrogates  all  treaties.  Vat- 
tel  maintains  that  war  abrogates  all  treaties  which  pre- 
suppose the  continuance  of  peace,  except  those  made  in 
anticipation  of  rupture.1'  Like  Vattel,  Kent  contends 
that,  "as  a  general  rule,  the  obligations  of  treaties  are 
dissipated  by  hostility,  and  are  extinguished  and  gone 
forever,  unless  revived  by  a  subsequent  treaty.  But 
if  a  treaty  contain  any  stipulations  which  contemplate 
a  state  of  future  war,  and  make  provisions  for  such  an 
exigency,  they  preserve  their  force  and  obligation  when 
the  rupture  takes  place."  l8  On  the  other  hand,  Fiore 
says:  "The  extinction  of  all  treaties  and  conventions 
concluded  between  the  belligerent  states  cannot  be  deemed 


THE  SHANTUNG  QUESTION'  437 

an  immediate  effect  of  war,  but  only  the  termination  of 
those  which,  by  their  nature  and  object,  are  necessarily 
inconsistent  with  a  state  of  war."  17 

Another  reasonable  doctrine  is  that  of  Calvo,  which 
states:1*  "The  solution  of  these  questions  depends  natu- 
rally upon  the  particular  character  of  the  engagements 
contracted.  Thus  all  are  agreed  in  admitting  the  rup- 
ture of  conventional  ties  concluded  expressly  with  a  view 
to  a  state  of  peace,  whose  special  object  it  is  to  promote 
relations  of  harmony  between  nation  and  nation,  such  as 
treaties  of  amity,  of  alliance,  and  other  acts  of  the  same 
nature  having  a  political  character.  As  to  customs  and 
postal  arrangements,  conventions  of  navigation  and  com- 
merce, and  agreements  relative  to  private  interests,  they 
are  generally  considered  as  suspended  till  the  cessation  of 
hostilities.  By  necessary  consequence,  it  is  a  principle 
that  every  stipulation  written  with  reference  to  war,  as 
well  as  all  clauses  described  as  perpetual  (qualifiees  de 
perpetuelles)  preserve  in  spite  of  the  outbreak  of  hos- 
tilities their  obligatory  force  so  long  as  the  belligerents 
have  not,  by  common  accord,  annulled  them  or  replaced 
them  with  others." 

John  Bassett  Moore  presented  his  own  conclusion  on 
the  subject  as  follows:  "It  is  evident  that  .  .  .  there  was 
a  recognition  of  the  principle,  which  is  now  received  as 
fundamental,  that  the  question  whether  the  stipulations 
of  a  treaty  are  annulled  by  war  depends  Upon  their  in- 
trinsic character.  If  they  relate  to  a  right  which  the 
outbreak  of  war  does  not  annul,  the  treaty  itself  re- 
mains unannuled."  10 

Taking  as  our  criterion  the  conclusion  arrived  at  by 
Moore  that  the  question  as  to  whether  the  stipula- 
tions of  a  treaty  are  annulled  by  war,  depends  upon  their 
intrinsic  character,  it  is  evident  that  the  treaties  in  ques- 
tion are  of  an  intrinsic  character  which  the  war  should 
nullify.     The  German  lease  convention  of  March  6,  1898, 

was  extorted  from  I  hina  by  the  threat  of  the  mailed  fiat. 


438      PROBLEMS  ARISING  SINCE  THE  WAR 

It  further  alienated  from  China  her  jurisdiction  over  the 
1  territory  for  ninety-nine  years.  In  the  event  of 
war,  the  continuance  of  an  alien  jurisdiction  on  the  soil 
of  China  would  he  inimical  to  her  safety,  and  it  is  but 
natural,  therefore,  that  she  should  avail  herself  of  the 
opportunity  of  war  to  remove  that  source  of  danger  and 
recover  the  delegated,  or  rather  wrested,  rights  of  sov- 
ereignty. Further,  the  lease  convention  granted  to  Ger- 
many the  right  of  fortification,  which  meant  that  Ger- 
many, in  time  of  war,  could  use  the  leased  territory  as 
a  basis  of  action  against  China.  It  is  plain,  therefore, 
that  such  a  treaty  should  not  be  allowed  to  persist  in 
time  of  war,  but  should  be  abrogated  upon  the  declara- 
tion of  the  same.  As  to  the  Tsingtao-Chinan  Railway 
and  the  adjoining  mines,  while  the  agreements  thereon 
were  not  intrinsically  of  a  character  incompatible  with 
the  status  of  war,  their  public  character  and  strategic 
and  political  relations  to  the  safety  of  China,  warranted 
their  being  taken  into  custody  by  the  terriorial  sovereign 
during  the  period  of  war,  and  pending  the  final  settle- 
ment by  peace  negotiation. 

It  can,  therefore,  be  fairly  concluded  that,  inasmuch 
as  the  declaration  of  war  on  the  part  of  China  had  abro- 
gated the  lease  convention  of  March  6,  1898,  all  the  Ger- 
man rights  in  Shantung  arising  thereform  should  have 
reverted  to  China  automatically,  and  that  Japan's  pos- 
session of  them  from  thai  moment  was  in  defiance  and 
contravention  of  China's  rights.  It  can  also  be  affirmed 
that  the  Kiaochow-Tsingtao  Railway  and  the  adjoining 
mines  should  have  come  into  the  custody  and  possession 
of  China  upon  her  declaration  of  war,  and  that  Japan's 
control  and  possession  of  the  same  was  not  only  con- 
summated in  violation  of  China's  neutrality,  but  also 
retained  in  defiance  and  contravention  of  China's  rights. 

We  now  come  to  the  third  issue — that  of  whether 
Japan's  possession   of    the  German    rights   in   Shantung 


THE  SHANTUNG  QUESTION  439 

is  validated  by  the  Treaty  of  May  25,  1915,  and  the 
Agreement  of  September  24,  1918.  As  regards  the  con- 
sent which  japan  exacted  from  China  by  virtue  of  Ar- 
ticle 1  of  the  Treaty  of  May  25,  1915,  respecting  Shan- 
tung,20 it  must  be  observed  that  the  assent,  as  provided 
therein,  conceding  for  argument's  sake  its  validity,  which 
is  contested,  is  not  applicable  to  the  final  settlement  at 
the  Paris  Peace  Conference.  For  the  negotiation  was 
not  between  Germany  and  Japan  as  stipulated  in  the 
provision,  but  between  the  Allied  and  associated  Powers 
on  the  one  hand  and  Germany  on  the  other.  Hence, 
inasmuch  as  Japan  was  "debarred  from  negotiating  sepa- 
rately with  Germany  in  respect  to  the  latter's  system  in 
Shantung  owing  to  the  decision  of  the  Conference  to 
deal  with  German  territories  and  concessions  without 
consulting  Germany,"  it  is  evident  that  Japan  did  not 
comply  with  the  provision  of  coming  to  an  agreement 
with  Germany  regarding  the  free  disposal  of  Kiaochow 
and  that  "the  article  in  question  should  be  deemed  in- 
operative." 21 

Granting,  however,  for  argument's  sake,  that  the  set- 
tlement as  reached  at  the  Paris  Peace  Conference  came 
within  the  scope  of  the  provision,  it  is  to  be  claimed 
that  the  consent  was  not  given  of  China's  free  will,  but 
rather  was  exacted  under  the  duress  of  the  ultimatum 
of  May  7,  1915,  and  the  demonstration  of  naval  and 
military  forces  accompanying  it.  While  international 
law  n  validity  of  treaties  imposed,  even  under 

coercion,  by  victorious  states  upon  the  vanquished,  it  is, 
not   within    reason   to   believe   that   interna- 
tional law  recognizes  the   validity  of  treaties  imposed  by 

one  friendly  nation  upon  another,  while  in  the  relation 
of  peace  and  amity,  it  is  tine  that  "coercion,  while  in- 
validating a  contract  produced  by  it,  does  not  invalidate 
a  treaty  so  produced.     Thus  there  can  he  no  question 

of  the  binding  force  of  the  treaty  which  followed  the 
French-German  War  which  led  to  the  dethronement  of 


440      PROBLEMS  ARISING  SINCE  THE  WAR 

Napoleon  I  IT,  though  its  terms  were  assented  to  under 
ion.  The  same  may  be  said  of  the  consent  of  France 
in  the  settlement  enforced  by  the  allies  after  Waterloo, 
and  so  of  the  treaty  by  which  Mexico  ceded  California 
and  the  adjacent  territory  to  the  United  States."22  It 
is,  nevertheless,  to  he  noted  that  what  is  recognized  by 
international  law  is  the  validity  of  treaties  made  in  con- 
sequence  of  war  though  imposed  necessarily  by  the  victor 
on  the  vanquished  under  duress,  and  that  it  is  not  con- 
ceivable that  international  law,  postulating  as  it  does 
the  fundamental  principles  of  territorial  sovereignty  and 
the  equality  and  independence  of  states,  will  countenance 
and  give  validity  to  an  agreement  or  treaty,  the  consent 
to  which  was  exacted  from  a  friendly  nation  in  time  of 
peace,  and  this  in  consequence  of  the  violation  of  the 
latter's  neutrality.  Fiore  says,  while  admitting  the  valid- 
ity of  treaties  imposed  by  victorious  states  upon  the 
defeated  in  consequence  of  war:  "Treaties  concluded 
between  states  must  he  freely  assented  to.  Assent  is  not 
valid  if  given  by  mistake,  extorted  by  violence  or  ob- 
tained by  fraud."  23 

The  official  statement  given  out  by  the  Chinese  Gov- 
ernment regarding  the  Chino-Japancse  negotiations  of 
1915,  clearly  proves  that  China's  consent  relating  to  the 
disposal  of  the  German  rights  in  Shantung  was  not  freely 
and  fully  given,  but  was  exacted  under  the  duress  of 
the  ultimatum  of  May  7.  1915.  The  statement  records 
that  on  February  2,  1915,  at  the  first  conference,  while 
she  consented  in  principle  to  Article  1  relating  to  the 
di<poval  of  the  German  rights  in  Shantung,  China  never- 
theless made  certain  counter-proposals  as  conditions  to 
rant  of  her  consent,  namely,  Japan's  pledge  to  re- 
store  Kiaochow,  China's  right  to  be  represented  at  the 
negotiations  between  Japan  and  Germany  when  dealing 
with  the  disposal  of  Kiaochow,  the  indemnification  of 
China's  losses  due  to  Japan's  operations  within  the 
Chinese  territory,  the  restoration  of  the  control  of  the 


THE  SHANTUNG  QUESTION  441 

Maritime  Customs,  the  telegraph  and  the  postoffices  in  the 
possession  of  Japan,  the  removal  of  the  Japanese  mili- 
tary railway  and  telegraph  lines  and  the  withdrawal 
of  Japanese  troops.24 

Again,  China's  reply  of  May  1,  1915,  to  Japan's  re- 
vised demands  of  April  26,  1915,  while  giving  her  con- 
sent to  any  settlement  that  Japan  might  reach  with  Ger- 
many at  the  conclusion  of  the  war,  the  Chinese  Govern- 
ment specifically  inserted  two  provisions  calculated  to 
preserve  the  sovereignty  of  China  in  Shantung  and  the 
leased  territory  and  to  act  as  conditions  to  the  grant  of 
the  consent  in  question : 

"The  Japanese  Government  declare  that  when  the 
Chinese  Government  give  their  assent  to  the  disposition 
of  interests  above  referred  to,  Japan  will  restore  the 
leased  territory  of  Kiaochow  to  China ;  and  further  rec- 
ognize the  right  of  the  Chinese  Government  to  partici- 
pate in  the  negotiations  referred  to  above  between  Japan 
and  Germany. 

"The  Japanese  Government  consent  to  be  responsible 
for  the  indemnification  of  all  losses  occasioned  by  Japan's 
military  operation  around  the  leased  territory  of  Kiao- 
chow. The  customs,  telegraphs  and  postoffices  within 
the  Leased  territory  of  Kiaochow  shall,  prior  to  the  resto- 
ration of  the  said  leased  territory  to  China,  be  adminis- 
tered as  heretofore  for  the  time  being.  The  railways  and 
telegraph  lines  erected  by  Japan  for  military  purposes 
arc  to  be  removed  forthwith.  The  Japanese  troops  now 
stationed  outside  the  original  leased  territory  oi  Kiao- 
chow are  now  to  hi-  withdrawn  first,  those  within  the 
original  leased  territory  are  to  he  withdrawn  on  the  res- 
toration  of    tlie   said   leased   territory   to   China." 

Japan's  ultimatum  of  May  7,  1915,  contains  a  refer- 
ence to  these  conditions  a-  set  forth  by  (Tina  which 
proves  beyond  doubt  that,  excep!  for  the  duress  or  coer- 
cion of  the  ultimatum,  (Tina  would  not  have  consented 
to  Japan's  settlemenl   with  German}   regarding  the  dis- 


442      PROBLEMS  ARISING  SINCE  THE  WAR 

posal  of  the  German  rights  in  Shantung  at  the  conclusion 
of  the  war,  and  that  it  was  the  duress  exerted  by  the 
ultimatum  that  caused  the  Chinese  Government  to  relin- 
quish the  proposed  conditions  and  to  accept  Japan's  for- 
mula for  the  consent  without  any  qualification.  The  ulti- 
matum ran,  in  part,  as  follows:25 

"Furthermore,  the  Chinese  Government  not  only  ig- 
nored the  friendly  feelings  of  the  Imperial  Government 
in  offering  the  restoration  of  Kiaochow  Bay,  hut  also 
in  replying  to  the  revised  proposals  tluy  even  demanded 

its  unconditional  restoration;  and  again  China  demanded 
that  Japan  should  hear  the  responsibility  of  paying  in- 
demnity for  all  the  unavoidable  losses  and  damages  re- 
sulting from  Japan's  military  operations  at  Kiaochow ; 
and  still  further  in  connection  with  the  territory  at  Kiao- 
chow China  advanced  other  demands  and  declared  that 
she  has  the  right  of  participation  at  the  future  Peace 
Conference  to  he  held  between  Japan  and  Germany.  Al- 
though China  is  fully  aware  that  the  unconditional  resto- 
ration of  Kiaochow  and  Japan's  responsibility  of  indem- 
nification for  the  unavoidable  losses  and  damages  can 
never  be  tolerated  by  Japan,  yet  she  purposely  advanced 
these  demands  and  declared  that  their  reply  was  final  and 
decisive." 

It  can  therefore  be  safely  affirmed  that,  except  for  the 
duress  of  the  ultimatum  with  the  accompanying  demon- 
stration of  force,28  China  would  not  have  given  up  these 
conditions  and  that  it  was  coercion — coercion  applied  to 
a  friendly  nation  while  in  the  relations  of  peace  and 
amity — that  extorted  the  consent.  It  is  also  obviously 
in  accordance  with  the  spirit  of  international  law  to  main- 
tain that  such  a  consent  obtained  under  duress  or  coer- 
cion should  invalidate  Japan's  possession  of  the  former 
German   rights   in   Shantung. 

Adverting  to  whether  the  agreement  of  September  24, 
1918,  validates  Japan's  control  over  the  Kiaochow-Chinan 
Railway,  Article  6  of  which  provi 


THE  SHANTUNG  QUESTION  443 

"The  Kiaochow-Chinan  Railway,  after  its  ownership  is 
definitely  determined,  is  to  be  made  a  Chino-Japanese 
joint  enterpri 

Article  4  of  which  stipulates: 

"Japanese  are  to  be  employed  at  the  headquarters  of  the 

above    m<  at   the   principal    railway 

stations  and  at  the  police  training  school/'  -T 

the  opinion  must  be  expressed  that  in  view  of  the  illegal 
consideration  for  which  the  agreement  was  made,  the 
agreement  in  question  cannot  forestall  China's  claims 
to  her  own  rights  and  Japan's  possession  of  the 

German  rights  in  Shantung.  While  it  is  true  that  "a 
consideration  is  essential  to  give  effect  to  a  contract,  but 
it  is  possible  to  conceive  of  a  treaty  which  has  no  con- 
sideration," 2S  it  is,  nevertheless,  reasonable  to  believe 
that  international  law,  upholding  as  it  does  the  funda- 
mental principle  of  territorial  sovereignty,  will  not  be 
prone  to  countenance  the  validity  of  a  treaty,  which  was 
exacted  on  the  basis  of  an  illegal  consideration  arising 
out  of  the  violation  of  the  fundamental  principle  of  ter- 
ritorial sovereignty.  For  the  Agreement  of  September 
24,  1918,  was  concluded  on  the  part  of  China  to  induce 
the  withdrawal  of  Japan's  civil  administration  estab- 
I  in  Shantung  in  violation  of  China's  sovereignty. 
It  is  an  accepted  principle  that  civil  administration  pro- 
ceed- out  of,  and  usually  follows,  military  occupation,  but, 

in  this  particular  case,  the  military  occupation  was  accom- 
plished in  violation  of  China's  neutrality  and  sovereignty 
own  abc  hence  the  civil  administration  pro- 

ut  of,  and  following,  an  illegal  military  occupa- 
i  cannot  but  be  illegitimate. 

The  official  Chinese  claims  at  the  Paris   Peace  Con- 
d-d: 

an  Imperial  ordinance  No    175  of  October  1, 
1917,  the  Ja]  i  overnmenl  established  a  Civil  Ad 


444      PROBLEMS  ARISING  SINCE  THE  WAR 

ministration  at  Tsingtao  with  branches  at  Fantze,  Chan- 
tien.  and  Qiinatl,  and  of  which  three  cities  are  situated 
along  the  railway  outside  of  the  leased  territory,  and  of 
the  fifty  kilometer  zone.  .  .  .  The  Eantze  hranch  of  the 
fapanese  Civil  Administration  has  even  asserted  juris- 
diction in  law  suits  between  Chinese  and  has  levied  taxes 
OH  them.   .   .   ."  29 


It  was  because  of  this  illegal  establishment  of  civil 
administration  in  consequence  of  a  military  occupation 
done  in  violation  of  China's  neutrality  and  sovereignty, 
and  the  consequent  indignation  of  the  Chinese,  especially 
the  Shantung  people,  that  the  Chinese  Government  was 
constrained  to  agree  with  Japan  for  the  Chino-Japane^e 
joint  administration  of  the  Kiaochow  Railway  and  the 
Japanese  supervision  of  the  railway  police  thereof  in 
exchange  for  the  withdrawal  of  Japan's  civil  adminis- 
tration.30"31 Hence,  inasmuch  as  the  consideration  for 
which  the  agreement  was  made  was  illegal  and  in  fact 
in  direct  violation  of  China's  territorial  sovereignty,  the 
agreement  of  September  24,  1918,  cannot  validate  Japan's 
control  over  the  Kiaochow-Chinan  Railway.  Or  else 
Japan's  violation  of  China's  neutrality  and  sovereignty, 
ad  of  being  discouraged  by  proper  penalties,  would 
be  encouraged  and  condoned  by  substantial  rewards, 
which  is  contrary  to  the  spirit  of  international  lav. 

It  may  be  argued  that,  in  connection  with  the  agree- 
ment, on  the  same  date,  an  advance  of  twenty  million 
yen  was  made  for  the  construction  of  the  Chinan-Shunteh 
and  Kaomi-Hsuchow  railways  and  that  another  advance 
of  a  similar  amount  was  made  for  the  construction  of 
four  railways  in  Manchuria  and  Mongolia;  hence  China 
was  i  !    from  making  any  objection  to  the  agree- 

ment of  September  24,  1918,  respecting  the  Kiaochow- 
Chinan  Railway.  It  is  tine  that  on  the  same  date  two 
other  separate  and  independent  agreements  were  signed 
for   the   construction   of   the   above-mentioned   railways, 


THE  SHANTUNG  QUESTION  445 

and  it  is  also  true  that  the  Chinese  Government  receive  1 
a  total  advance  of  forty  million  yen.  As  far  as  the  two 
agreements  are  concerned  regarding  the  construction  of 
the  railways  in  question,  they  may  stand  valid.  It  is, 
nevertheless,  to  be  noted  that  the  agreement  of  Sep- 
tember 24,  1918,  respecting  the  control  of  the  Kiaochow 
Railway,  was  entirely  separate  and  independent  from 
the  other  two,  and  was  made,  not  in  consideration  of 
the  two  advances  of  twenty  million  yen  each,  nor  for 
the  consideration  of  Janpan's  construction  of  the  two 
railways  in  Shantung  and  the  four  railways  in  Man- 
churia and  Mongolia,  but  rather  in  consideration  of  the 
withdrawal  of  Japan's  civil  administration  and  Japa- 
nese troops  along  the  Kiaochow-Chinan  Railway,  except 
a  contingent  at  Chilian,  which,  as  we  have  seen,  was 
illegal.  The  only  fact  in  common  between  this  il 
agreement  and  the  other  valid  agreements  for  which  the 
two  advances  had  been  received  was  that  they  were  con- 
cluded and  signed  on  the  same  day — September  24,  1918. 
Beyond  this,  there  was  no  relation  between  these  agree- 
ments.33 Hence,  inasmuch  as  the  two  advances  of  twenty 
million  yen  each  were  made  in  connection  with  the  other 
agreements,  that  of  September  24,  1918,  respecting  the 
control  of  the  Kiaochow-Chinan  Railway,  still  remains 
invalid  and  therefore  does  not  confer  upon  Japan  any 
title  or  right  of  possession  and  control  with  respect  to 
the   Kiaochow-Chinan   Railway. 


Summarizing  the  conclusions  we  have  so  far  reached 
relating  to  tin-  issues  of  the  Shantung  question,  it  can  In- 
held  that,  while  admitting  the  ground  for  an  honest 
difference  "t  opinion  relative  to  her  right  to  attack  Kiao- 
chow, Japan  had  no  right  to  land  In  r  troops  ;it  Lungkow, 
march  through  (  hinese  neutral  territory  and  seize  the 
German  Kiaochow-Chinan  Railway  and  the  adjoining 
mines,  in  violation  of  China's  neutrality  ami  sovereignty; 


446      PROBLEMS  ARISING  SINCE  THE  WAR 

that  China's  declaration  of  war  did  abrogate  the  lease 
convention  of  March  6,  1898,  and  thus  automatically 
regained  the  former  German  concessions  arising  out  of 
the  convention  and  entitled  her  to  the  custody  and  the 
possession  of  the  Kiaochow-Chinan  Railway  and  the 
adjoining  mines,  pending  the  final  settlement  at  the 
Peace  negotiation;  and  that  Japan's  possession  of  Ger- 
man rights  in  Shantung  was  not  validated  by  the  consent 
relative  to  Japan's  settlement  with  Germany  as  to  the 
disposal  of  the  German  rights  in  Shantung  as  embodied 
in  Article  1  of  the  Treaty  of  May  25,  1915,  respecting 
the  Province  of  Shantung,  which  consent,  as  we  have 
seen,  was  extorted  under  the  duress  of  an  ultimatum; 
nor  was  it  justified  by  the  agreement  of  September  24, 
1918,  respecting  adjustment  of  questions  concerning 
Shantung,  which,  as  we  recall,  was  contracted  for  an 
illegal  consideration,  that  is,  the  withdrawal  of  Japa- 
nese troops  from  the  Kiaochow-Chinan  Railway  and  of 
the  Japanese  civil  administration  from  Shantung,  both 
of  which  were  illegally  established.  In  view  of  these 
conclusions,  we  cannot  but  be  constrained  to  reach  the 
conclusion  that  Japan  has  held  the  leased  territory  of 
Kiaochow  as  against  the  rights  of  China  since  China's 
declaration  of  war  on  August  24,  1917,  and  that  she 
has  acquired  the  German  rights  in  the  Kiaochow-Chinan 
Railway  and  the  adjoining  mines  in  violation  of  China's 
neutrality  and  sovereignty  and  in  defiance  of  her  re- 
peated protests.  Hence  Japan  is  under  legal  and  moral 
obligation  to  return  to  China  the  leased  territory  of  Kiao- 
chow and  to  place  in  the  custody  and  possession  of  the 
Chinese  Government  the  German  Kiaochow-Chinan  Rail- 
way and  the  adjoining  mines,  subject,  however,  if 
necessary,  to  some  form  of  proper  compensation. 

In  view  of  these  conclusions,  wc  affirm  that  the 
Shantung  decision  as  rendered  at  the  Paris  Peace  Con- 
ference by  the  Council  of  Three  on  April  30,  1919,  was 


THE  SHANTUNG  QUESTION  447 

unjust.  The  Council  awarded  Japan  all  the  German 
rights  in  Shantung,  and,  in  addition,  the  right  to  officer 
the  railway  police  along  the  Kiaochow-Chinan  Railway, 
and  to  establish  a  permanent  concession  in  Tsingtao. 

Articles   156,   157,   158,  of  the  Treaty  of  Peace  with 
Germany,  embodying  this  decision,  read: 


"Germany  renounces,  in  favor  of  Japan,  all  her  rights, 
title  and  privileges — particularly  those  concerning  the 
territory  of  Kiaochow,  railways,  mines  and  submarine 
cables — which  she  acquired  in  virtue  of  the  treaty  con- 
cluded by  her  with  China  on  March  6,  1898,  and  of  all 
other  arrangements  relative  to  the  Province  of  Shantung. 

"All  German  rights  in  the  Tsingtao-Tsinanfu  Railway, 
including  its  branch  lines  together  with  its  subsidiary 
property  of  all  kinds,  stations,  shops,  fixed  and  rolling 
stock,  mines,  plant  and  material  for  the  exploitation  of 
the  mines,  are  and  remain  acquired  by  Japan,  together 
with  all  rights  and  privileges,  attaching  thereto. 

"The  German  state  submarine  cables  from  Tsingtao 
to  Shanghai  and  from  Tsingtao  to  Chefoo,  with  all  the 
rights,  privileges  and  properties  attaching  thereto,  are 
similarly  acquired  by  Japan,  free  and  clear  of  all  charges 
and  encumbrances.     (Art.  156.) 

"The  movable  and  immovable  property  owned  by  the 
German  state  in  the  territory  of  Kiaochow,  as  well  as 
all  the  rights  which  Germany  might  claim  in  consequence 
of  the  works  or  improvements  made  or  of  the  expenses 
incurred  by  her,  directly  or  indirectly  in  connection  with 
this  territory,  are  and  remain  acquired  by  Japan,  free 
and  clear  of  all  charges  and  encumbrances.     I  Vrt.  157.) 

"<  iermany  shall  hand  over  to  Japan  within  three  months 
from  the  coming  into  force  of  the  present  treaty  the 
archiv  ters,  plans,  title  deeds  and  documents  of 

every  kind,  wherever  they  may  be,  relating  to  the  admin- 
istration, whether  civil,  military,  financial,  judicial  or 
other,  of  the  territory  of  Kiaochow. 

"Within  the  same  period  Germany  shall  give  particu- 
lars to  Japan  of  all  treaties,  arrangements  or  agreements 


448      PROBLEMS  ARISING  SINCE  THE  WAR 

relating  to  the  rights,  title  or  privileges  referred  to  in  the 
two  preceding  articles."     (Art.  158.) 

It  will  be  seen  that  the  rights  conferred  upon  Japan 
were  not  those  belonging  to  Germany,  but  those  legiti- 
mately belonging  to  China,  as  we  hold  that  the  German 
rights  had  automatically  reverted  to  China  upon  the  dec- 
laration of  war  on  August  14,  1917.  Hence  the  Council 
of  Three  has  awarded  to  Japan  the  rights,  not  of  Ger- 
many, but  of  China, — not  of  an  enemy,  but  of  an  ally  or 
associate  in  the  war.  As  the  Chinese  Peace  Delegation 
at  Paris  put  it :  "It  appears  clear  that  the  Council  has 
been  bestowing  to  Japan  rights,  not  of  Germany,  but  of 
China;  not  of  the  enemy,  but  of  an  ally.  A  more  power- 
ful ally  has  reaped  benefits  at  the  expense,  not  of  the 
common  enemy,  but  of  a  weaker  ally."  35 

What  is  worse,  the  Council  of  Three  has  awarded  these 
legitimate  rights  of  China  to  Japan — a  state  that  has  per- 
petuated the  crime  of  violation  of  China's  neutrality  and 
sovereignty.  Instead  of  requiring  the  offending  state  to 
restore  the  former  German  rights  to  the  rightful  sover- 
eign owner,  which  should  be  the  dictates  of  reason  and 
conscience,  the  Council  condoned  and  encouraged  Japan's 
conduct  by  awarding  her  the  German  rights  in  Shan- 
tung. The  inconsistency  is  all  the  more  glaring  when  it 
is  seen  that,  in  the  case  of  Germany,  her  violation  of 
Belgian  neutrality  was  so  severely  condemned  and  pen- 
alized, but  in  the  case  of  Japan,  for  her  violation  of 
China's  neutrality,  especially  in  view  of  the  absence  of 
any  ground  of  military  necessity,  she  was  not  only  not 
penalized,  but  on  the  contrary,  awarded  the  rights,  not 
of  Germany,  but  of  China, — a  friendly  ally  and  loyal 
associate  in  the  war.30 

It  may,  however,  be  contend  d  that,  unjust  as  the 
Shantung  decision  might  be,  the  Allied  Powers  were 
bound  by  the  secret  agreements  of  February  and  March, 
1917,  to  award  the  German  rights  in  Shantung  to  Japan.37 


THE  SHANTUNG  QUESTION  449 

It  must,  nevertheless,  be  observed  that  these  secret  agree- 
ments were  made  prior  to  the  acceptance  of  Mr.  Wilson's 
peace  terms  as  set  forth  in  his  address  to  the  United 
States  Congress,  January  8,  1918,  and  in  his  subsequent 
lies,  and  hence  were  abrogated  by  the  subsequent 
acceptance  of  his  principles  of  peace.  To  this  effect, 
testimony  was  put  on  record  before  the  Senate  Commit- 
tee on  Foreign  Relations  as  follows : 

".  .  .  On  looking  over  the  addresses  of  President  Wil- 
son and  the  statement  made  by  Secretary  Lansing  to  the 
German  Government  with  regard  to  the  bases  of  peace,  I 
found  this  (reading)  : 

'The    unqualified   acceptance   by    the    present 
German  Government  and  by  a  large  majority  of 
the  German  Reichstag  of  the  terms  laid  down  by 
the  President  of  the  United  States  of  America  in 
his  address  to  the  Congress  of  the  United  States 
on  the  8th  of  January,  1918,  and  in  his  subse- 
quent addresses,  justifies  the  President  in  mak- 
ing a  frank  and  direct  statement  of  his  decision 
with  regard  to  the  communications  of  the  Ger- 
man Government  of  the  8th  and  12th  of  October, 
1918.' 
"Now  as  to  the  subsequent  addresses,  although  there 
is  nothing  directly  bearing  upon  the  question  of  the  four- 
teen point-  mentioned  in  the  address  of  January  18,  one 
of  the  subsequent  addresses  was  that  on  the  4th  of  July 
at  Washington's  Tomb  at    Mount  Vernon  in   which   he 
said: 

'No  half-way  decision  is  conceivable,    Tl 
are  the  ends  for  which  the  associated  p  :oples  of 

the   world  are  fighting  and  which  must   be  COn- 
led  them  before  there  can  be  peace.1 
"Then  he  mentions,  one,  'the  destruction  of  any  arbi- 
trary power  anywhere/  and  so  on,  and  two  is  the  one  to 
which  I  want  to  call  attention   (reading): 

'The  settlement  of  every  question,  whether  of 

itory,  of  sovereignty,  of  economic  arrange- 
ment, or  of  political  relationship,  upon  the  basis 


450      PROBLEMS  ARISING  SINCE  THE  WAR 

of  the  free  acceptance  of  that  settlement  by  the 
people  immediately  concerned,  and  not  upon  the 
basis  of  the  material  interest  or  advantage  of 
any  other  nation  or  people  which  may  desire  a 
different  settlement  for  the  sake  of  its  own  ex- 
terior  influence  or  mastery.' 
"I   think  it  was  in  this  memorandum  to  the  President 
that  I  mentioned  this  point.    1  cannot  say  positively  that 
it   was   in   that  or  some  other  connection   that   I    called 
attention  to  this  statement  and  said  that  my  understand- 
ing was  that  all  the  powers  who  entered  into  the  agree- 
ment for  the  negotiation  of  peace  after  the  armistice  of 
November  11  practically  accepted  the  bases  of  peace  as 
laid  down  by  the  American  Government  and  that  this 
was  one  of  the  bases  of  peace,  and  that  no  except  inn, 
no  reservation,  had  been   made  to  this  by  any  of  the 
Powers,   by   Great   Britain,   France,   or  Japan,   although 
Great  Britain  did  make  reservations  with  regard  to  some 
other  things,  and  that  therefore  it  seemed  to  me  that 
any  prior  arrangement  such  as  these  secret  treaties  be- 
tween Great  Britain  and  Japan  and  between  France  and 
Japan  ought  not  to  he  held  any  longer  in  force  because 
they   were   really  abrogated  by  the  acceptance  of  these 
bases  of  peace."  38 

It  may  be  further  contended  that  the  Shantung  deci- 
sion in  favor  of  Japan  was  necessary  to  prevent  Japan's 
leaving  the  Paris  Peace  Conference,  and  thus  to  save  the 
League  of  Nations  just  on  the  eve  of  formation.  In 
fact,  that  was  the  opinion  of  Mr.  Wilson,  and  probably 
the  real  reason  for  his  decision.39  It  must,  however,  be 
considered  that  the  fear  of  Japan's  withdrawal  from 
the  Conference  or  refusal  to  sign  the  Treaty  was  not 
well  founded.  It  is  unlikely  that  Japan  would  exclude 
herself  from  the  League  for  the  loss  of  the  former 
German  rights  in  Shantung.  Secretary  Lansing  testified 
before  the  Senate  Committee  on  Foreign  Relations  that 
he  believed  Japan  would  have  signed  the  Treaty  even 
though  the  decision  should  have  been  against  her,  the 
main  consideration  being  membership  in  the  League:40 


THE  SHANTUNG  QUESTION  451 

"Senator  Johnson  of  California.  Would  the  Japa- 
nese signatures  to  the  League  of  Nations  have  been  ob- 
tained if  you  had  not  made  the  Shantung  agreement? 

"Secretary  Lansing.      I  think  so. 

"Senator  Johnson  of  California.    You  do? 

"Secretary  Lansing.     I  think  so. 

"Senator  Johnson  of  California.  So  that  even 
though  Shantung  had  not  been  delivered  to  Japan,  the 
League  of  Nations  would  not  have  been  injured? 

"Secretary  Lansing.     I  do  not  think  so. 

"Senator  Johnson  of  California.  And  you  would 
have  had  the  same  signatories  that  you  have  now? 

"Secretary  Lansing.     Yes ;  one  more,  China. 

"Senator  Johnson  of  California.  One  more,  China. 
So  that  the  result  of  the  Shantung  decision  was  simply 
to  lose  China's  signature  rather  than  to  gain  Japan's? 

"Secretary  Lansing.  That  is  my  personal  view,  but 
I  may  be  wrong  about  it." 

Granted  for  argument's  sake  that  there  was  real  dan- 
ger of  Japan's  leaving  the  Conference  or  refusing  to 
become  a  member  of  the  League,  it  is  manifest  that  the 
decision  was  rendered  on  the  ground  of  expediency  rather 
than  that  of  intrinsic  justice.  While  it  is  admitted  that 
expediency,  when  not  involving  questions  of  morality, 
may  become  a  guiding  principle  of  statesmanship,  it  must 
be  maintained,  nevertheless,  that  when  moral  issues  are 
involved,  expediency  must  be  subordinated  to  morality. 
In  other  words,  in  statesmanship,  as  in  life,  morality 
must  reign  supreme,  notwithstanding  the  considerations 
of  expediency. 

Passing  from  the  injustice  of  the  Shantung  decision, 
we  now  come  to  consider  Japan's  policy  in  relation  to 

Shantung  itself.  In  the  statement  made  by  Mr.  Wilson, 
August  6,  1919,*1  the  policy  of  Japan  relative  to  Shan- 
tung was  said  to  be  as  follows : 

"The  policy  of  Japan  is  to  hand  hack-  the  Shantung 
Peninsula  in  full  sovereignty  to  China,  retaining  only  the 


452      PROBLEMS  ARISING  SINCE  THE  WAR 

economic  privileges  granted  to  Germany,  rind  the  right 
to  establish  a  settlement  under  the  usual  conditions  at 
Tsingtao. 

"  i  he  owners  of  the  railway  will  use  special  police  only 
to  insure  security  for  traffic.  They  will  be  used  for 
no  other  purpose. 

"The  police  force  will  be  composed  of  Chinese,  and 
such  Japanese  instructors  as  the  directors  of  the  rail- 
way may  select  will  be  appointed  by  the  Chinese  Gov- 
ernment." 

Taking  this  as  the  policy  of  Japan,  it  will  be  noticed 
that  she  presumed  to  have  in  her  possession  the  sover- 
eignty of  Shantung  which  she  had  in  no  way  acquired, 
and  which  was  expressly  reserved  in  the  lease  conven- 
tion of  March  6,  1898.  Whatever  sovereignty  is  now 
in  her  possession  must  have  been  acquired  in  violation 
of  China's  neutrality  and  sovereignty.  And  yet  Japan 
pledges  to  return  Shantung  to  China  in  full  sovereignty. 
That  is,  Japan  proposes  to  return  something  to  China 
which  by  right  is  not  hers  but  China's. 

Probably  what  she  means  by  the  sovereignty  of  Shan- 
tung is  the  leased  territory  of  Kiaochow,  which  she  pro- 
posed to  return,  and,  in  fact,  pledged  to  do  so.  If  so 
(as  we  have  seen),  inasmuch  as  China's  declaration  of 
war,  on  August  14,  1917,  abrogated  the  lease  convention 
of  March  6,  1898,  and  hence  recovered  to  herself  the 
rights  of  the  leased  territory,  Japan  is  proposing  to  return 
something  to  China  which  by  right  belongs  to  China, 
and  which  Japan  has  held,  ever  since  the  day  of  China's 
declaration  of  war,  in  contravention  of  the  sovereign 
rights  of  China. 

It  will  be  further  noticed  that  the  second  part  of 
Japan's  policy  is  to  retain  all  German  economic  conces- 
sions in  Shantung,  including  the  Kiaochow-Chinan  Rail- 
way and  the  adjoining  mines.  It  is  needless  to  point 
out  again  that  these  economic  concessions  have  been 
seized   and   retained   by   Japan   in   violation  of    China's 


THE  SHANTUNG  QUESTION  453 

neutrality  and  in  defiance  of  China's  repeated  protests, 
and  that  since  China's  declaration  of  war  they  should 
have  been  in  the  custody  and  possesison  of  China,  pend- 
ing final  settlement  with  Germany  at  the  Peace  negotia- 
tion, and  that  Japan  is  under  moral  and  legal  obliga- 
tions to  restore  the  same  to  China.  And  yet  Japan  pro- 
poses to  retain  these  ill-gotten  concessions. 

Again,  Japan  plans  to  establish  a  railway  police  along 
tin-  Kiaochow-Chinan  Railway  officered  by  the  Japanese, 
though  manned  by  the  Chinese,  basing  her  right  to  do  so 
on  the  Agreement  of  September  24,  1918,  respecting  ad- 
justment of  questions  concerning  Shantung.  As  has  been 
already  shown,  the  agreement  in  question  is  void  or  void- 
able, because  of  its  illegal  consideration.  Besides,  the 
right  of  police  is  in  excess  of  the  former  German  rights 
in  Shantung.  In  the  agreement  of  March  21,  1900,  re- 
specting the  Kiaochow-Chinan  Railway  regulations,42  it 
was  specifically  stipulated  (Art.  16)  : 

"If  troops  are  needed,  outside  of  the  hundred  li  (fifty 
kilometer)  zone,  they  shall  be  dispatched  by  the  Gov- 
ernor of  the  Province  of  Shantung.  No  foreign  troops 
may  be  employed  for  this  purpose." 

In  the  subsequent  convention  of  November  28,  1905,4S 
Germany  engaged  to  withdraw  her  troops  from  Kiaochow 
and  Kaomi  to  Tsingtao  (Arts.  1  and  2)  ;  and  to  leave 
the  neutral  zone  and  railway  therein  to  the  police  of  the 
Chinese  Government.  In  view  of  the  limitations  of  the 
German  rights  in  Shantung,  therefore,  Japan's  claim  to 
establish  the  railway  police  along  the  Kiaochow-Chinan 
Railway  is  in  of  the  German  rights  and  in  viola- 

tion of  China's  sovereignty. 

The  political  significance  of  the  Shantung  question  can- 
not be  overestimated.  This  question  represents  the  his- 
toric issue  of  the  struggle  between  the  Chinese  nation 
and  the  foreign   Powers,  the  territorial  sover- 

eignty.    Ever  since  her  opening,  China  was  confronted 


454      PROBLEMS  ARISING  SINCE  THE  WAR 

with  the  greatest  prohlem  of  all  her  history — that  is,  how 
tu  preserve  her  territorial  integrity  and  political  inde- 
pendence in  the  face  of  foreign  aggression.  She  at- 
tempted to  solve  this  great  prohlem  by  the  Boxer  Uprising 
in  1900,  which  only  plunged  her  into  the  depths  of  humil- 
iation. Failing  in  this,  she  brought  to  pass  the  Chinese 
Revolution  of  1911,  aiming  to  take  hold  of  the  reins  of 
government  and  thus  to  establish  a  strong  and  stable 
government  for  her  own  protection.  Now  this  Shan- 
tung question  represents  foreign  aggression  or  encroach- 
ment on  the  territorial  sovereignty  of  China,  which  she 
aims  to  uphold  under  the  aegis  of  the  Republic.  Hence 
in  resisting  Japan's  aggression  in  Shantung,  China  is  sim- 
ply following  the  tradition  of  her  historical  development. 
To  win  in  the  Shantung  question  is  to  succeed  in  the 
assertion  and  maintenance  of  her  territorial  sovereignty. 
To  fail  is  to  acknowledge  servitude.  Hence,  the  Shan- 
tung question  will  become  the  battle  cry  of  Chinese  na- 
tionalism, and  hence  the  Chinese  people,  determined  as 
they  are  to  preserve  their  territory  and  sovereignty,  will 
never  yield  in  the  Shantung  affair. 

Again,  this  Shantung  question  represents  the  conflict 
of  Japan's  policies  in  China  and  China's  policy  for  her- 
self. As  we  recall,  Japan  aims  to  exploit  the  natural 
resources  of  China,  and  to  establish  her  position  of  para- 
mount influence.  She  also  aims  to  control  and  domi- 
nate China — by  strengthening  her  influence  around  and 
in  Peking  through  her  dominance  in  Manchuria  and  Shan- 
tung. On  the  other  hand,  China  strives  for  self-preserva- 
tion— for  her  independence  and  sovereignty.  She  aims 
to  preserve  what  she  has,  and  in  addition  to  recover  her 
lost  or  delegated  rights  of  sovereignty.  Hence  the  Shan- 
tung question  represents  the  conflict  of  the  policies  of 
the  two  nations. 

Further,  the  Shantung  question  involves  the  sanctity 
of  international  law,  the  maintenance  of  which  consti- 
tuted one  of  the  objects  of  the  World  War.     It  raises 


THE  SHANTUNG  QUESTION  455 

the  question  as  to  whether  the  nations  are  to  observe  the 
principles  of  international  law  or  are  to  relapse  into 
anarchy.  If  they  mean  to  uphold  the  sanctity  of  inter- 
national law,  they  must  right  the  wrong  done  in  the 
Shantung  decision.  Hence,  the  successful  and  right  solu- 
tion of  the  Shantung  question  means  the  vindication  of 
the  sanctity  of  international  law. 

Finally,  the  Shantung  question  represents  the  moral 
issue  of  might  versus  right.  By  virtue  of  her  military 
and  naval  forces,  Japan  has  acquired  the  German  rights 
in  Shantung  in  evident  violation  of  China's  neutrality 
and  sovereignty.  On  the  other  hand,  because  of  the 
insufficient  backing  of  force,  China  has  failed  to  recover 
the  rights  which  should  have  properly  belonged  to  her. 
If  Japan  wins  eventually  in  the  Shantung  question,  it 
means  an  unfortunate  reaffirmation  of  the  principle  of 
"might  makes  right."  On  the  other  hand,  if  China  wins, 
it  is  a  successful  vindication  of  the  principle  of  "Right 
makes  might." 

As  to  remedies  for  the  Shantung  question,  there  are 
three.  First,  Japan  may  change  her  policy  and  so  suc- 
cessfully solve  the  question.  But  this  is  scarcely  to  be 
expected,  at  least  in  the  immediate  future.  She  will  stand 
by  the  agreement  of  September  24,  1918,  and  the  Treaty 
of  May  25,  1915,  or  stiil  better,  the  original  Twenty-one 
Demands.  She  will  also  stand  by  the  Shantung  decision 
as  embodied  in  Articles  156,  157,  158  of  the  Treaty  of 
Peace  with  Germany,  which  gives  a  legal  sanction  to 
her  position  in  Shantung.  It  is  therefore  reasonable  to 
expect  that,  in  the  absence  of  other  adequate  remedies, 
Japan  will  not  likely  yield  in  tin-  Shantung  question  in 
any  substantial  way,  unless  and  until  she  changes  her 
policy  toward   China  as   a   whole. 

The  second  remedy  is  the  League  of  Nations  or  Con- 
ference "f  Powers.  Will  the  League  or  Conference 
reconsider  the  question  and  right  tin-  wrong  of  the  Shan- 
tung decision? — That  is  the  question  which  few  will  dare 


456      PROBLEMS  ARISING  SINCE  THE  WAR 

to  answer.  Be  it  as  it  may,  it  is  within  reason  to  believe, 
however,  that  the  League  or  Conference  will  have  to  take 
into  consideration  the  pride  and  honor  of  Japan,  for  the 
maintenance  of  which  Japan  will  do  all  in  her  powrr  to 
prevent  a  reconsideration  of  the  question.  It  is  also  rea- 
sonable to  expect  that  in  case  of  a  renewal  of  the  Anglo- 
Japanese  Alliance,  unless  Great  Britain  in  the  Conference 
or  League  is  released  from  the  obligation,  she  will  be 
obligated  to  support  Japan  in  the  Council  and  the  Assem- 
bly, which  means  that,  in  the  case  of  the  League,  China 
cannot  get  a  unanimous  report  or  recommendation  from 
the  Council  or  a  report  or  recommendation  from  the 
Assembly  concurred  in  by  all  the  members  represented  on 
the  Council  and  a  majority  of  the  other  members,  exclu- 
sive in  each  case  of  the  parties  to  the  dispute,  which  is 
requisite  to  give  the  report  or  recommendation  the  sanc- 
tion of  the  League,  in  case  one  party  chooses  to  comply 
therewith. 

The  third  remedy  is  that  China  should  become  strong 
herself,  and  so  cause  Japan  to  respect  her  rights.  This 
seems  to  be  the  shortest,  as  well  as  the  noblest,  way  to  a 
solution  of  the  question.  For  Japan's  action  in  Shan- 
lung  is  based  on  the  inability  of  China  to  uphold  her 
rights.  As  soon  as  Japan  sees  that  China  is  able  to  do 
so,  rather  than  run  the  gauntlet  of  a  conflict  with  her, 
Japan  will  yield.  Further,  Japan's  policies  toward  China, 
it  will  be  remembered,  are  partly  founded  on  China's 
weakness.  The  minute  China  becomes  strong,  the  raison 
d'etre  of  some  of  Japan's  policies  will  be  eliminated,  and 
she  will  surely  change  her  attitude  and  policy  in  conse- 
quence. Hence,  in  the  absence  of  a  voluntary  change  of 
policy  on  the  part  of  Japan  and  adequate  action  by  the 
League  of  Nations  or  Conference  of  Powers,  the  remedy 
will  lie  in  the  rise  of  a  strong  China. 

The  basis  of  solution  of  the  Shantung  question  is  sim- 
ple. Giving  due  recognition  to  Japan's  service  and  sac- 
rifice  in  th.e  capture  of  Kiaochow,  and  paying  due  regard 


THE  SHANTUNG  QUESTION  457 

to  the  sovereignty  of  China,  the  principle  of  the  solution 
should  be,  on  the  one  hand,  that  Japan  may  receive,  if 
necessary,  some  form  of  compensation  agreeable  to 
China,  and,  on  the  other,  that,  in  full  recognition  of 
China's  sovereignty,  Japan  should  restore  to  China  all 
German  concessions  in  Shantung,  including  the  Kiao- 
chow-Chinan  Railway,  the  adjoining  mines,  and  the 
leased  territory,  subject,  however,  to  the  proviso  that 
these  concessions  should  not  be  mortgaged  or  alienated 
by  China  in  any  way  to  any  other  foreign  Power.  Thus 
Japan  would  receive  her  share  of  reward  and  China 
would  maintain  her  territorial  sovereignty  and  recover 
her  rights. 

i 

After  the  foregoing  was  written,  the  Shantung  Ques- 
tion entered  upon  a  new  stage  of  development,  which 
deserves  our  attention.  On  September  7,  1921,  the  Japa- 
nese Government  submitted  to  the  Chinese  Government 
nine  proposals  as  the  terms  of  settlement  for  the  dis- 
pute.45 On  October  5,  1921,  the  Chinese  Government 
made  reply,40  in  general  rejecting  the  proposals. 

In  the  first  proposal,  the  leasehold  of  Kiaochow  and 
the  rights  originally  granted  to  Germany  with  regard 
to  the  fifty  kilometer  zone  were  to  be  restored  to  China. 
This  is  simply  a  reiteration  of  the  pledge  of  restoration 
made  in  the  exchange  of  notes,  May  25,  1915.  In  the 
eyes  of  the  Chinese,  this  proposal  carries  no  more  v. 
than  one  to  restore  to  China  what  by  rights  belon 
lur.  For  China  regards  the  leasehold  of  Kiaochow  as 
having  been  abrogated  by  her  declaration  of  war  against 
German  on  August  14,  I'M 5,  and  as  one  which  .should 
have  reverted  to  her  possession  on  that  date.  Hence  the 
reply : 

"'I  Ik-    lease    of    Kiaochow    expired    immediately 
China's  declaration  of  war  against  Germany.     Now  that 

Japan   is  only  in  military  occupation  of  the  leased   Inn- 


458      PROBLEMS  ARISING  SINCE  THE  WAR 

tory  the  latter  should  be  wholly  returned  to  China  with- 
out conditions.  There  can  he  no  question  of  any  lease- 
hold." 


The  second  proposal  offered  to  surrender  the  claim 
to  an  exclusive  Japanese  settlement  or  an  international 
concession  in  Tsingtao  as  was  stipulated  in  the  exchange 
of  notes,  May  25,  1915.  This  abandonment,  however, 
was  to  be  made  on  conditions  that  would  safeguard  the 
economic  interests  of  the  Japanese  and  other  foreigners. 
First,  China  was  to  "open  of  its  own  accord  the  entire 
leased  territory  of  Kiaochow  as  a  port  of  trade,"  which 
was  also  a  reiteration  of  a  stipulation  in  the  exchange 
of  notes,  May  25,  1915.  Second,  China  was  "to  permit 
the  nationals  of  all  foreign  countries  freely  to  reside  and 
to  carry  on  commerce,  industry,  agriculture  or  any  other 
lawful  pursuits  within  such  territory,"  the  pursuit  of 
agriculture  being  specifically  mentioned,  which  was  gen- 
erally considered  as  an  occupation  open  to  the  citizens 
or  natives  only.  Third,  China  undertook  "to  respect  the 
vested  interests  and  rights  of  all  foreigners,  regardless 
of  the  validity  of  acquisition.  Fourth,  she  would  like- 
wise "carry  out  forthwith  the  opening  of  suitable  cities 
and  towns  within  the  Province  of  Shantung  for  residence 
and  trade  of  the  nationals  of  all  foreign  countries,"  which 
was  one  of  the  stipulations  of  the  Treaty  of  May  25, 
1915.  Fifth,  regulations  for  the  opening  of  places  under 
the  foregoing  clauses  should  be  determined  by  the  Chinese 
Government  with  the  Powers  interested. 

In  reply,  China  welcomed  the  surrender  of  the  claim 
to  an  exclusive  settlement  or  an  international  conces- 
sion and  also  pointed  out  that,  inasmuch  as  China  had 
on  previous  occasions  declared  her  intention  to  open  Kiao- 
chow as  a  commercial  port  for  the  convenience  of  trade 
and  residence  of  the  nationals  of  all  friendly  nations, 
their  could  be  "no  necessity  for  the  establishment  of  any 
purely  foreign  settlement  again."     She  objected  partial- 


THE  SHANTUNG  QUESTION  459 

larly  to  the  inclusion  of  agriculture  among  the  pursuits 
allowed  to  foreigners. 

"Agricultural  pursuits  concern  the  fundamental  means 
of  existence  of  the  people  of  a  country;  and  according 
to  the  usual  practice  of  all  countries,  no  foreigners  are 
permitted  to  engage  in  them." 

She  declined  to  concede  indiscriminate  recognition  to  all 
vested  interests  and  rights  of  foreigners,  but  pointed  out 
the  difference  between  those  legitimately  acquired  under 
the  German  regime  and  those  illegally  possessed  during 
the  Japanese  military  occupation. 

"The  vested  rights  of  foreigners  obtained  through  law- 
ful processes  under  the  German  regime  shall  of  course 
be  respected,  but  those  obtained  by  force  and  compulsion 
during  the  period  of  Japanese  military  occupation  and 
against  law  and  treaties  can  in  nowise  be  recognized." 

She  also  objected  to  the  idea  of  being  called  upon  to  open 
cities  and  towns  in  Shantung  as  commercial  ports,  and 
declared  that  "the  opening  of  such  places  should  neverthe- 
less be  left  to  China's  own  judgment  and  selection  in 
accordance  with  circumstances,"  plainly  maintaining  her 
own  full  sovereignty.  She  further  declined  to  enter  into 
previous  negotiations  as  to  the  regulations  governing  the 
opening  of  such  places,  thus  again  asserting  the  prin- 
ciple of  sovereignty,  although  conceding  that  she  would 
"undoubtedly  bear  in  mind  the  objecl  of  affording  facili- 
ties to  international  trade  and  formulate  them  according 
to  established  precedents  of  self-opened  port 

In  the  third  proposal,  the  joint  enterprise  was  pro]  I 
of  the  Kiaochow-Tsinanfu  Railroad,  as  stipulated  in  the 
Agreement  of  September  24,  1918,  i  ting  the  con- 

trol of  the  Kiaochow  Railway,  and  also  of  the  mines 
appurtenant  thereto.    To  this  China  strenuously  objected 


460      PROBLEMS  ARISING  SINCE  THE  WAR 

(hi  the  ground  not  only  of  the  illegal  acquisition  in  con- 
sequence of  the  violation  of  China's  neutrality  and  sov- 
ereignty, but  al  e  undesirability  of  the  foreign  con- 
trol of  railways  and  the  necessity  of  unification  and 
nationalization  of  the  same. 


"The  joint  operation  of  the  Shantung  railways,  that  is, 
the  Kiaochou-Tsinanfu  line,  by  China  and  Japan  is  ob- 
jected to  by  the  entire  Chinese  people.     It  is  because  in 

all  countries  there  ought  to  be  a  unified  system  for  rail- 
ways, and  the  joint  operation  unity  of  railway 
management  and  impairs  the  rights  of  sovereignty;  and, 
in  view  of  the  evils  of  the  previous  cases  of  joint  opera- 
tion and  the  impossibility  of  correcting  them,  China 
can  now  no  longer  recognize  it  as  a  matter  of  principle. 
The  whole  line  of  the  Shantung  Railway,  together  with 
the  right  of  control  and  management  thereof,  should  be 
completely  handed  over  to  China:  and  after  a  just  valua- 
tion of  its  capital  and  properties,  one-half  of  the  whole 
value  of  the  line  not  returned  shall  be  purchased  back 
by  China  within  a  fixed  period.  As  to  the  mines  a; >i un- 
tenant to  the  Shantung  Railway  which  were  already  oper- 
ated by  the  Germans,  their  plan  of  operation  shall  be 
fixed  in  accordance  with  the  Chinese  Alining  Laws." 

The  fourth  proposal  offered  to  renunciate  the  prefer- 
ential rights  with  regard  to  foreign  assistance  in  persons, 
capital  and  material,  as  stipulated  in  the  Sino-Gennan 
Treaty  of  March  6,  1S{>8.  This  would  eliminate  the  wall 
of  preferential  claims  and  thus  open  Shantung  to  the 
enterprise  of  all  foreigners,  indicating  the  desire  of  the 
Japanese  to  maintain  equality  of  commercial  opportuni- 
ties. To  this  favorable  proposal  China  was  not  opposed, 
and  hence  she  made  no  reply  thereto.  Upon  a  closer 
examination,  however,  this  apparent  renunciation  is  tan- 
tamount   to  a  surrender  of   something   which   Japan   has 

not  acquired.     Maintaining  as  we  do  that  the  Kiaochow 

Convention  of  March  6,  1898,  which  embodied  the 


THE  SHANTUNG  QUESTION  461 

preferential  clause,  was  abrogated  by  China's  declaration 
of  war  against  Germany,  it  is  but  plain  that  the  German 
rights  of  preference  were  nullified  upon  the  declaration 
of  hostility.  While  Japan  might  claim  that  the  treaty 
of  peace  with  Germany,  June  28,  1919,  awarded  her  the 
German  rights  in  Shantung,  it  is  to  be  maintained  that 
China  did  not  sign  that  treaty  and  thus  refused  to  recog- 
nize the  validity  of  the  award.  While  voluntary  renun- 
ciation on  the  part  of  Japan  might  be  commendable,  her 
proposal  did  not  harmonize  with  the  fundamental  con- 
viction and  principle  of  the  Chinese. 

In  the  fifth  proposal,  the  extensions  of  the  Kiaochow- 
Tsinanfu  Railway,  as  provided  in  the  agreement  of  Sep- 
tember 24,  1918,  respecting  the  construction  of  the 
Tsinan-Shunteh  and  Kaomi-Shuchou  railways,  and  the 
options  for  the  construction  of  the  Yentai-Weihsien  Rail- 
way as  stipulated  in  the  treaty  of  May  25,  1915,  respect- 
ing Shantung,  were  to  be  thrown  open  for  the  common 
activity  of  the  international  financial  consortium.  Inas- 
much as  the  exchange  of  letters  between  Thomas  W. 
Lamont  and  N.  Kajiwara  on  May  11,  1920,  and  the 
Japanese  entrance  into  the  New  International  Ranking 
Consortium  placed  these  railway  concessions  within  the 
scope  of  the  New  Consortium,  this  proposal  was  deemed 
as  a  mere  statement  of  a  situation  already  in  existence. 
The  reply  was  therefore  made : 

"With  reference  to  the  construction  of  the  extension 
of  the  Shantung  Railway,  thai  is,  the  Tsinan  Shunteh 
and  Kiaochow-I  louchou  lines.  China  will,  as  a  matter  of 
course,  negotiate  with  international  financial  bodi< 

Bui  as  the  Chefoo-Weihsien  Railway  concession  wa 
acted  under  duress  by  the  treaty  of  May  25,  1915,  which 
should  he  either  abrogated  or   revised,  the   suggestion 
thereaboul  was  deemed  to  be  "entirely  a  different  • 
and  could  not  "be  discussed  in  the  same  category." 


462      PROBLEMS  ARISING  SINCE  THE  WAR 

The  sixth  proposal  tendered  to  make  the  status  of  the 
customs  house  at  Tsingtao  as  forming  an  integral  part 
of  the  general  customs  system  of  China  clearer  than  un- 
der the  German  regime.  Inasmuch  as  the  full  control  of 
the  customs  house  at  Tsingtao  was  considered  as  a  natural 
consequence  of  the  restoration  of  Kiaochow  Leased  Ter- 
ritory, China  contended  that  the  status  of  the  Tsingtao 
Customs  House  should  be  the  same  as  that  of  any  other 
Chinese   customs  house. 

"When  the  leased  territory  is  restored,  the  customs 
house  thereat  should  be  placed  under  the  complete  con- 
trol and  management  of  the  Chinese  Government  and 
should  not  be  different  from  the  other  customs  houses  in 
its  system  of  administration." 

In  the  seventh  proposal,  public  property  used  for  ad- 
ministrative purposes  within  the  leased  territory  of  Kiao- 
chow was  tendered  to  be  transferred  to  China,  but  as 
to  the  maintenance  and  operation  of  public  works  and 
establishments,  special  arrangement  was  to  be  made  be- 
tween the  Japanese  and  Chinese  governments.  This  pro- 
posal volunteered  the  transfer  of  public  property  used 
for  administrative  purposes,  but  still  insisted  on  previous 
negotiation  or  special  arrangement  for  the  disposal  of 
public  works  and  establishments,  which  constituted  one 
of  the  four  conditions  attached  to  the  Japanese  pledge 
of  restoration  of  Kiaochow  as  embodied  in  the  exchange 
of  notes,  May  25,  1915.  Inasmuch  as  all  public  proper- 
ties, either  for  administrative  purposes  or  otherwise, 
should  be  returned  with  the  restoration  of  the  leased 
territory  without  special  arrangements,  the  proposal  was 
therefore  rejected: 

"I  he  extent  of  public  properties  is  too  wide  to  be 
limited  only  to  that  portion  used  for  administrative  pur- 
poses. If  it  is  the  sincere  wish  of  Japan  to  return  all 
the  public  properties  to  China,  she  ought  to  hand  over 
completely  the  various  kinds  of  official,  semi-official,  mu- 


THE  SHANTUNG  QUESTION  463 

nicipal  and  other  public  properties  and  enterprises  to 
China  to  be  distributed  according  to  their  nature  and 
kind,  to  the  administrations  of  the  central  and  local 
authorities,  to  the  municipal  council  and  to  the  Chinese 
customs,  etc.,  as  the  case  may  be.  Regarding  this  there 
is  no  necessity  for  any  special  arrangement." 

The  eighth  item  proposed  the  appointment  of  repre- 
sentative commissioners  by  the  Chinese  and  Japanese 
governments  to  arrange  detailed  plans  "for  carrying  into 
effect  the  terms  of  settlement  above  indicated  and  for 
the  purpose  of  adjusting  other  matters  not  embodied 
therein."     To  this  suggestion  China  made  no  reply. 

The  ninth  and  last  term  of  settlement  tendered  the 
withdrawal  of  Japanese  troops  along  the  Kiaochow- 
Tsinanfu  Railway  upon  the  organization  by  China  of 
a  police  force  to  take  over  the  protection  of  the  line. 
This  offer  was,  however,  accompanied  by  the  reserva- 
tion that  the  question  of  the  organization  of  a  special 
police  guarding  the  railway  should  be  reserved  for  fu- 
ture consideration  between  Japan  and  China.  This 
exception  signified  that  Japan  still  held  on  to  the  claim 
of  establishing  a  police  force  trained  and  controlled  by 
the  Japanese,  as  stipulated  in  Article  4  of  the  Agree- 
ment of  September  24,  1918,  respecting  the  control  of 
the  Kiaochow-Tsinanfu  Railway.  As  this  proposal  was 
tantamount  to  the  original  claim  of  a  police  force  trained 
and  controlled  by  the  Japanese,  and  as  the  agreement 
in  question  of  September  24,  1918,  was  considered  invalid 
or  voidable,  and  since  the  presence  of  Japanese  troops 
infringes  her  sovereignty.  I  hina  could  not  but  decline 
the  offer : 

"The  question  of  the  withdrawal  of  Japanese  troops 
of  Shantung  Province  bears  no  connection  with  the 
restoration  of  the  Kiaochow  Leased  Territory  and  the 

Chinese  Government  has  urged  repeatedly  fof  its  actual 


464      PROBLEMS  ARISING  SINCE  THE  WAR 

execution.  It  is  only  proper  that  the  entire  Japanese 
Army  of  Occupation  should  now  he  immediately  evacu- 
ated. As  to  the  policing  of  the  Kiaochow-Tsinan  Kail- 
way,  t'hina  will  immediately  send  a  suitable  force  of 
Chinese  railway  police  to  take  over  the  duties." 


From  the  ahove  terms  of  settlement  as  offered  by 
Japan,  it  can  be  seen  that  what  Japan  tendered  to  sur- 
render was  not  hers  by  right,  hut  rather  what  she  should 
have  given  up.  Inasmuch  as  the  Kiaochow  Leased  Con- 
vention of  March  6,  1898,  is  regarded  as  abrogated  with 
the  declaration  of  war,  the  Kiaochow  Leasehold  and  the 
German  preferential  rights  have  therewith  been  nulli- 
fied. As  the  exchange  of  letters  between  Thomas  \V. 
Lamont  and  N.  Kajiwara  on  May  11,  1920,  placed  the 
extensions  of  the  Shantung  Railway  within  the  scope 
of  the  New  International  Banking  Consortium,  the  rail- 
ways in  question  should  have  become  open  to  the  com- 
mon activities  of  the  New  Consortium.  The  only  term 
of  settlement  that  might  be  commended  and  regarded 
with  favor  is  the  offer  to  surrender  the  claim  to  an 
exclusive  Japanese  settlement  or  an  international  con- 
cession, hut  this  is  offset  by  a  requirement  to  recognize 
all  vested  interests  and  rights  acquired  during  the  Japa- 
nese military  occupation,  legitimate  or  illegitimate. 

On  the  other  hand,  it  is  also  plain  that  Japan  did 
not  propose  to  surrender  any  vital  interests,  or  to  meet 
any  fundamental  objections  of  the  Chinese.  She  still 
insisted  on  the  joint  enterprise  of  the  Kiaochow-Tsinanfu 
Railway,  future  negotiation  regarding  the  organization  of 
the  railway  police,  special  arrangement  for  the  disposal 
of  public  works  and  establishments,  clearer  definition  of 
the  status  of  the  customs  house  at  Tsingtao,  and  the  rec- 
ognition of  vested  interests  acquired  by  foreigners  legiti- 
tnately  or  otherwise.  In  short,  Japan  still  aims  to  achieve 
economic  domination  in  Shantung.  She  made  no  con- 
fession of  her  mistake  or  crime   in   landing  her  troops 


THE  SHANTUNG  QUESTION  465 

at  Lungkow  and  then  inarching  through  the  Chinese 
territory  and  seizing  the  Kiaochow-Tsinanfu  Railway 
and  the  adjoining  mines,  and  thus  failed  to  recognize  and 
respect  the  fundamental  principle  of  the  sovereignty  of 
China.  She  still  ignored  the  basic  contention  of  the 
Chinese  that  China's  declaration  of  war  abrogated  all 
treaties,  conventions  and  agreements  with  Germany,  in- 
clusive of  the  Kiaochovv  Leasehold,  and  that  China  thus 
recovered  to  herself  all  the  former  German  concessions. 
She  further  failed  to  concede  that  her  possession  of  Ger- 
man rights  in  Shantung  was  validated,  neither  by  the 
treaty  of  May  25,  1915.  which  was  concluded  under 
duress,  nor  by  the  Agreement  of  September  24,  1918, 
respecting  the  control  of  the  Kiaochow-Tsinanfu  Kail- 
way,  which  was  entered  upon  for  illegal  consideration, 
nor  by  the  Treaty  of  Peace  with  Germany,  June  28, 
1919,  to  which  China  was  not  a  contracting  party. 

The  Chinese  Government  therefore  prefaced  the  reply 
with  a  declaration  of  disappointment  over  the  terms  of 
settlement  and  the  failure  of  Japan  to  meet  the  funda- 
mental contentions  and  objections  of  the  Chinese. 

"With  reference  to  the  important  Shantung  Question 
which  is  now  pending  between  China  and  Japan,  China 
has  indeed  been  most  desirous  of  any  early  settlement  for 
the  restitution  of  her  sovereign  rights  and  territory.  The 
reason  why  China  has  not  until  now  hern  able  to  com- 
mence negotiations  with  Japan  is  because  of  the  fad 
that  the  basis  upon  which  Japan  claims  to  negotiate  are 
all  of  a  nature  either  highly  objectionable  to  the  Chinese 
Governmenl  and  the  Chinese  people,  or  such  to  which 
they  have  never  given  their  recognition.  Furthermore, 
in  regard  to  the  Shantung  Question,  although  Japan  has 

mad'-    many    vague   declarations    She    has    in    fact    had    no 

plan  which  is  fundamentally  acceptable.  Therefore,  the 
case  has  been  pending  for  many  years  much  to  the  unex- 
pectation  of  (  hina.     (  to  September  7  Japan     ubmitted 

certain  proposals  for  the  readjustment  of  the  Shantung 

•on   in   the    form   of   a   memorandum   together   with 


466      PROBLEMS  ARISING  SINCE  THE  WAR 

a  verbal  statement  by  the  Japanese  Minister  to  the  effect 
that  in  view  of  the  great  principle  of  Sino-Japanese 
friendship  Japan  has  decided  upon  this  fair  and  just 
plan  as  her  final  concession,  etc.  After  careful  con- 
sideration the  Chinese  Government  feels  that  much  in 
Japan's  new  proposals  is  still  incompatible  with  the 
repeated  declarations  of  the  Chinese  Government,  with 
the  hopes  and  expectations  of  the  entire  Chinese  people, 
and  with  the  principles  laid  down  in  treaties  between 
China  and  the  foreign  Powers.  If  these  proposals  are 
to  be  considered  the  final  concession  on  the  part  of  Japan, 
they  surely  fall  short  to  prove  the  sincerity  of  Japan's 
desire  to  settle  the  question." 

Consequent  to  the  rejection  of  the  terms  of  settlement, 
and  anxious  to  reach  a  solution  of  the  Shantung  Ques- 
tion at  an  early  date,  the  Chinese  Government  made  the 
reservation  at  the  conclusion  of  the  reply  "of  seeking  a 
solution  of  the  question  whenever  a  suitable  occasion 
tits  itself,"  apparently  giving  the  hint  that,  with 
a  concurrence  of  the  Powers  interested,  the  Shantung 
Question  might  be  made  a  subject  for  discussion  among 
the  Powers. 


NOTES  TO  CHAPTER  XXVII 

1.  Millard,  Our  Eastern  Question,  p.  91. 

2.  The  Chino- Japanese  Negotiations,  the  Chinese  Official 
Statement,  1915,  p.  19. 

3.  Ibid.,  p.  53. 

4.  MacMurray,  Treaties  and  Agreements  with  and  Concerning 
China.   1917/7. 

5.  Questions  for  Readjustment,  submitted  by  China  to  the 
Paris  Peace  Conference,  1919,  p.  82. 

6.  Hertslet's  China  Treaties,  Vol.  1,  No.  59,  p.  351  ;  also  see 
chapter  on  Leased  Territories. 

7.  Cf.  The  Shantung  Question,  p.  40. 

8.  MacMurray,  1917/7. 

9.  Cushing,  Att.  Gen.,  1855,  7  op.  367,  cited  in  J.  B.  Moore, 
Vol.  7.  p.  1 

10.  The  Shantung  Question,  submitted  by  China  to  the 
Paris  Peace  Conference,  published  by  the  Chinese  National  Wel- 
fare Society,  March,  1920,  p.  40. 


THE  SHANTUNG  QUESTION  467 

11.  Note  from  the  Ministry  of  Foreign  Affairs  to  the 
Japanese  Minister  at  Peking  protesting  against  violation  of  neu- 
trality, Sept.  27,  1914,  The  Shantung  Question,  op.  cit.,  p.  58. 

12.'  Ministry  of  Foreign  Affairs  to  Japanese  Minister  at 
Peking,  Sept.  '30,   1914,  The  Shantung  Question,  op.  cit..   p.  59. 

13.  Japanese  Minister  at  Peking  to  the  Chinese  Ministry  of 
Foreign  Affairs,  Oct.  2,  1914,  The  Shantung  Question,  ibid.,  pp. 
59-60. 

14.  f.  B.    Moore,  International  Law  Digest,  Vol.  7,  p.  1101. 

15.  Ibid.,  Vol.  5,  p.  384. 

16.  Kent,  Comm.  I,  176,  cited  in  J.  B.  Moore,  Vol.  5,  p.  385n. 

17.  Fiore's  Internatl.  Law  Codified,  translated  by  E.  M. 
Borchard,  p.  538. 

18.  Calvo,  Droit  Int.  (4th  Ed.),  IV,  65,  Sec.  1931,  cited  in 
J.  B.  Moore,  Vol.  5,  p.  385. 

19.  J.  B.  Moore,  Columbia  Law  Review,  Apr.,  1901,  Vol.  1, 
No.  4,  pp.  209-223,  pp.  217-218;  J.  B.  Moore,  Int'natl.  Law  Dig., 
Vol.  5,  p.  383. 

20.  The  Chino-Japanese  Negotiations,  op.  cit.,  p.  49,  Art.  1, 
Treaty  of  1915  respecting  Shantung. 

21.  The  Shantung  Question,  pp.  17-18. 

22.  J.  B.  Moore,  op.  cit.,  Vol.  5,  p.  183. 

23.  Fiore's  Int'natl.  Law  Codified,  op.  cit.,  p.  332. 

24.  The  Chino-Japanese  Negotiations,  op.  cit.,  pp.  4-5. 
24A.    Ibid.,  p.  35. 

25.  Ibid.,  pp.  40-41. 

26.  Cf.  Hearings  before  the  Committee  on  For.  Rel.,  U.  S. 
Sen.,  66th  Cong.,  1st  Sess.,  Sen.  Document  No.  106,  on  Treaty 
of  Peace  with  Germany  signed  at  Versailles  on  June  28,  1919, 
pp.  561-562,  testimony  of  Mr.  Ferguson. 

27.  The  Shantung  Question,  pp.  67-68. 

28.  J.  B.  Moore,  op.  cit.,  Vol.  5,  p.  183. 

29.  The  Shantung  Question,  p.  42. 

30.  Ibid.,  p.  42. 

31.  Cf.  Statements  by  the  Chinese  Peace  Delegation,  May  3, 
1919,  Millard's  Review,  Supp.,  July  17.  1920,  p.  10. 

32.  Cf.  Hearings,  op.  cit.,  pp.  444-445,  Mr.  T.  F.  Millard's 
testimony. 

33.  For  the  text  of  the  agreement,  see  The  Shantung  Ques- 
tion, op.  cit.,  pp.  66-70. 

34.  This  declaration  was  officially  presented  to,  and  taken 
cognizance  of,  by  the  Allied  and  associated  Governments — the 
statement  by  the  Chinese  Peace  Delegation,  Maj  3,  I'd1',  Mil- 
lard's Review,  Supp.,  July  17,  1920,  p    10, 

35.  Statement  by  the  Chinese  Peace  Delegation,  ibid. 

36.  It  should  be  further  observed  thai  inasmuch  as  the  Kiao- 
chow  lease  convention   stipulated  that  Germany  should  engage 

n.it    to    Miblet    the    leasehold    to    any    other    slate,    the    Shantung 
decision  violated  the  sanctity  of  this  treaty  obligation. 

37.  For  the  seeret  agreements,  see  Millard's  Review,  Supp., 
July  17,  1920,  pp.  1-3. 


468      PROBLEMS  ARISING  SINCE  THE  WAR 

38.  Hearings,  op.  cit,  pp.  622-623,  the  testimony  of  Professor 
E.  T.  Williams. 

39.  Cf.  Hearings,  Conference  at  White  House,  Aug.  19,  1919, 
pp.  S3!  532. 

40.  Hearings,  Senate  Doc.  No.  106,  op.  cit.,  p.  182. 

41.  X.  Y.  limes,  Aug.  7,  1919;  Millard's  Review,  Supp.,  July 
17,  1920,  p.  16;  also  see  Chas.  B.  Elliott,  The  Shantung  Ques- 
tion, American  Journal  of  Internatl.  Law,  Vol.  13,  1919,  p.  728. 

42.  The  Shantung  Question,  pp.  50-54. 

43-44.  [bid.,  pp.  54-56;  Sen.  Hearings,  Sen.  Doc.  No.  106,  op. 
cit.,  p.  561,  the  testimony  of  Mr.  Ferguson. 

45.  Copy  furnished  by  the  Chicago  Daily  Xcws,  dispatch  by 
the  Associated   Press. 

( 1  )  The  leasehold  of  Kiaochow  and  the  rights  originally 
granted  to  Germany  with  regard  to  the  fifty  kilometer  zone 
around  the  Kiaochow  Bay  shall  be  restored  to  China. 

(2)  The  Japanese  Government  will  abandon  plans  for  the 
establishment  of  a  Japanese  exclusive  settlement  of  an  open 
international  settlement  in  Tsingtao :  Provided  that  China 
engages  to  open  of  its  own  accord  the  entire  leased  territory  of 
Kiaochow  as  a  port  of  trade  and  to  permit  the  nationals  of  all 
foreign  countries  freely  to  reside  and  to  carry  on  commerce, 
industry,  agriculture  or  any  other  lawful  pursuits  within  such 
territory,  and  that  she  further  undertakes  to  respect  the  vested 
rights  of  all  foreigners.  China  shall  likewise  carry  out  forth- 
with the  opening  of  suitable  cities  and  towns  within  the  province 
of  Shantung  for  residence  and  trade  of  the  nationals  of  all  for- 
eign countries.  Regulations  for  the  opening  of  places  under 
the  foregoing  clauses  shall  be  determined  by  the  Chinese  Gov- 
ernment upon  consultation  with  the  powers  interested. 

(3)  The  Kiaochow-Tsinanfu  Railway  and  all  mines  appur- 
tenant thereto  shall  be  worked  as  a  joint  Sino-Japanese  enter- 
prise. 

(4)  Japan  will  renounce  all  preferential  rights  with  regard  to 
foreign  assistance  in  persons,  capital  and  material,  stipulated  in 
the  Sino-C  rman  Treaty  of  March  6,  1898. 

(5)  Rights  relating  to  the  extensions  of  the  Kiaochow- 
Tsinanfu  Railway,  as  well  as  options  for  the  construction  of  the 
Ventai-Weihsien  Railway,  will  be  thrown  open  for  the  common 
activity  of  the  international  financial  consortium  in  China. 

(6)  The  status  of  the  customs  house  at  Tsingtao  as  forming 
an  integral  part  of  the  general  customs  system  of  China  shall 
be  made  clearer  than  under  the  German  regime. 

( 7 1  Public  property  used  for  administrative  purposes  within 
the  leased  territory  of  Kiaochow  will,  in  general,  be  trans- 
ferred to  China ;  it  being  understood  that  the  maintenance  and 
operation  of  public  works  and  establishments  shall  be  arranged 
een  the  Japanese  and  Chinese  Governments 

(8)  With  a  view  to  arranging  detailed  plans  for  carrying  into 
effect  the  terms  of  settlement  above  indicated  ami  for  the  pur- 
pose of  adjusting  other  matters  not  embodied  therein,  the  Jap- 


THE  SHANTUNG  QUESTION'  469 

anese  and  Chinese  Governments  shall  appoint  their  representative 
commissioners  as  soon  as  possible. 

(9)  The  Japanese  Government  have  on  more  than  one  occasion 
declared  willingness  to  proceed  to  the  recall  of  Japanese  troops 
now  stationed  along  the  Kiaochow-Tsinanfu  Railway  upon 
organization  by  China  of  a  police  force  to  assume  protection 
of  the  railway.  As  soon  as  the  Chinese  Government  shall  have 
organized  such  a  police  force  and  notified  the  Japanese  Govern- 
ment to  that  effect,  Japanese  troops  will  be  ordered  to  hand  over 
to  the  Chinese  police  the  charge  of  the  railway  protection,  and 
thereupon  immediately  to  withdraw.  It  is,  however,  to  be  under- 
Stood  that  the  question  of  the  organization  of  a  special  police 
guarding  the  Kiaochow-Tsinanfu  Railway  shall  be  reserved  for 
future  consideration  between  Japan  and  China. 

46.  Copy  furnished  by  the  Chinese  Legation,  Washington, 
D.  C.  With  reference  to  the  important  Shantung  Question 
which  is  now  pending  between  China  and  Japan,  China  has 
indeed  been  most  desirous  of  an  early  settlement  for  the  restitu- 
tion of  her  sovereign  rights  and  territory.  The  reason  why 
China  has  not  until  now  been  able  to  commence  negotiations 
witli  Japan  is  because  of  the  fact  that  the  basis  upon  which 
Japan  claims  to  negotiate  are  all  of  a  nature  either  highly 
objectionable  to  the  Chinese  Government  and  the  Chinese  people, 
or  such  to  which  they  have  never  given  their  recognition.  Fur- 
thermore, in  regard  to  the  Shantung  Question,  although  Japan 
has  made  many  vague  declarations  she  has  in  fact  had  no  plan 
which  is  fundamentally  acceptable.  Therefore  the  case  has  been 
pending  for  many  years  much  to  the  uncxpectation  of  China. 
On  September  7  Japan  submitted  certain  proposals  for  the 
readjustment  of  the  Shantung  Question  in  the  form  of  a 
memorandum  together  with  a  verbal  statement  by  the  Jap 
Minister  to  the  effect  that  in  view  of  the  great  principle  of  Sino- 
Japanese  friendship  Japan  has  decided  upon  this  fair  and  just 
plan  as  her  final  concession,  etc.  After  careful  consideration 
the  Chinese  Government  feels  that  much  in  Japan's  new  pro- 
is  still  incompatible  with  the  repeated  declarations  of  the 
Chinese  Government,  with  the  hopes  and  expe<  tations  of  the 
entire  Chinese  people,  and  with  the  principles  laid  down  in 
treaties  between  China  and  the  Foreign  Powers.  It  these  pro- 
posals are  to  be  considered  the  final  concession  on  the  part  of 
Japan,  they  surely  fall  short  to  prove  the  sincerity  of  Japan's 
desire  to  settle  the  question.    For  instance: 

(1)  The  lea  e  of  Kiaochow  expired  immediately  on  China's 
declaration  of  war  against  Germany.    Now  that  Japan  is  only  in 

military    occupation    of    the    leased    territory    the    latter    should    he 
wholly    returned    to   China    without   conditions.      There   |  an    be    DO 

n  of  any  leasehold. 

(2)  As  to  the  opening  of  Kiaochow  Bay  as  a  commercial  port 
for  the  convenience  of  trade  and  residence  of  the  nationals  of 

all    friendly    powers.    China    has    already    on    previous    occasions 
communicated  her  intentions  to  do   10   to  thi  and   there 


470      PROBLEMS  ARISING  SINCE  THE  WAR 

can  be  no  I  for  the  establishment  of  any  purely   foreign 

settlement  again.    Agricultural  pursuits  concern  the  fundamental 

means  of  existence  of  the  people  of  a  country;  and  according 
to  the  usual  practice  of  all  countries,  no  foreigners  are  per- 
mitted to  in  them.  The  vested  rights  of  foreigners 
obtained  through  lawful  processes  under  the  German  regime 
shall  of  coins,  be  respected  but  those  obtained  by  force  and 
compulsion  during  the  period  of  Japanese  military  occupation 
and  against  law  and  treaties  can  in  no  wise  be  recognized.  And 
again,  although  this  same  article  in  advocating  the  opening  of 
cities  and  towns  of  Shantung  as  commercial  ports  agrees  with 
China's  intention  and  desire  of  developing  commerce,  the  open- 
ing of  such  places  should  nevertheless  be  left  to  China's  own 
judgment  and  selection  in  accordance  with  circumstances.  As  to 
the  regulations  governing  the  opening  of  such  places,  China  will 
undoubtedly  bear  in  mind  the  object  of  affording  facilities  to 
international  trade  and  formulate  them  according  to  established 
precedents  of  self-opened  ports  and  sees,  therefore,  no  necessity 
in  this  matter  for  any  previous  negotiations. 

(3)  The  joint  operation  of  the  Shantung  Railway,  that  is, 
the  Kiaochow-Tsinan  Line,  by  China  and  Japan  is  objected  to 
by  the  entire  Chinese  people.  It  is  because  in  all  countries  there 
ought  to  be  a  unified  system  for  railways,  and  joint  operation 
destroys  unity  of  railway  management  and  impairs  the  rights  of 
sovereignty;  and.  in  view  of  the  evils  of  the  previous  cases  of 
joint  operation  and  the  impossibility  of  correcting  them,  China 
can  now  no  longer  recognize  it  as  a  matter  of  principle.  The 
whole  line  of  the  Shantung  Railway,  together  with  the  right  of 
control  and  management  thereof  should  be  completely  handed 
over  to  China:  and  after  a  just  valuation  of  its  capital  and 
properties  one-half  of  the  whole  value  of  the  line  not  returned 
shall  he  purchased  back  by  China  within  a  fixed  period.  As  to 
the  mines  appurtenant  to  the  Shantung  Railway  which  were 
already  operated  by  the  Germans,  their  plan  of  operation  shall 
be  fixed  in  accordance  with  the  Chinese  Mining  Laws. 

(5)  With  reference  to  the  construction  of  the  extension  of  the 
Shantung  Railway,  that  is,  the  Tsinan-Shunteh  and  Kiaochow- 
rlsuchow  Lines,  China  will,  as  a  matter  of  course,  negotiate  with 
international  financial  bodies.  As  to  the  Chefoo-Weihsien  Rail- 
wax,  it  is  entirely  a  different  case,  and  cannot  be  discussed  in 
the  same  category. 

(6)  The  Customs  House  at  Tsintau  was  formerly  situated  in 
a  leased  territory,  and  the  system  of  administration  differed 
slightly  from  others.  When  the  leased  territory  is  restored,  the 
Customs  House  thereat  should  be  placed  under  the  complete  con- 
trol and  management  of  the  Chinese  Government  and  should  not 
be  different  from  the  other  Customs  Houses  in  its  system  of 
administration. 

(7)  The  extent  of  public  properties  is  too  wide  to  be  limited 
only  to  that  portion  used  for  administrative  purposes.  The 
meaning  of  the  statement  in  the  Japanese  memorandum  that  such 


THE  SHANTUNG  QUESTION  471 

property  will  in  principle  be  transferred  to  China,  etc.,  rather 
lacks  clearness.  If  it  is  the  sincere  wish  of  Japan  to  return  all 
the  public  properties  to  China,  she  ought  to  hand  over  com- 
pletely the  various  kinds  of  official,  semi-official,  municipal 
and  other  public  properties  and  enterprises  to  China  to  be 
distributed,  according  to  their  nature  and  kind,  to  the  admin- 
istrations of  the  central  and  local  authorities,  to  the  municipal 
council  and  to  the  Chinese  Customs,  etc.,  as  the  case  may  be. 
Regarding  this  there  is  no  necessity  for  any  special  arrangement, 
and 

(9)  The  question  of  the  withdrawal  of  Japanese  troops  from 
the  Province  of  Shantung  bears  no  connection  with  the  restora- 
tion of  the  Kiaochow  Leased  Territory  and  the  Chinese  Gov- 
ernment has  repeatedly  urged  for  its  actual  execution.  It  is 
only  proper  that  the  entire  Japanese  Army  of  Occupation  should 
now  be  immediately  evacuated.  As  to  the  policing  of  the  Kiao- 
chow-Tsinan  Railway,  China,  will  immediately  send  a  suitable 
force  of  Chinese  Railway  Police  to  take  over  the  duties.  The 
foregoing  statement  gives  only  the  main  points  which  are  unsat- 
isfactory and  concerning  which  the  Chinese  Government  feels  it 
absolutely  necessary  to  make  a  clear  declaration.  Further,  in 
view  of  the  marked  difference  of  opinion  between  the  two 
countries,  and  apprehending  that  the  case  might  long  remain 
unsettled,  China  reserves  to  herself  the  freedom  of  seeking  a 
solution  of  the  question  whenever  a  suitable  occasion  presents 
itself. 


PART  VI 

A  FOREIGN  POLICY  FOR  CHINA 

XXVIII.  Policy  of  Preservation. 

XXIX.  Policy  of  Recovery. 

XXX.  Policy  of  the  Golden  Rule. 

XXXI.  Policy  of  World  Welfare. 

XXXII.  A  Policy  Toward  Japan  in  Particular. 


XXVIII 
THE  POLICY  OF  PRESERVATION 

We  have  studied  the  diplomatic  history  of  China,  the 
policies  of  the  Great  Powers,  especially  of  Japan,  the  im- 
pairments of  China's  sovereignty,  and  the  questions  aris- 
ing since  the  World  War.  Using  these  facts  and  princi- 
ples as  a  basis,  we  are  now  ready  to  offer  suggestions  for 
the  construction  of  a  foreign  policy  for  China,  applicable 
to  the  present  international   situation. 

The  first  policy  we  would  advocate  for  her  is  the  policy 
of  preservation.  In  view  of  her  history,  the  policies  of 
the  Great  Powers,  particularly  Japan,  and  the  new  situa- 
tion which  has  arisen  since  the  Great  War,  and  especially 
in  view  of  the  rich  and  enormous  natural  resources  which 
always  tempt  Foreign  Powers,  there  is  no  policy  which 
should  claim  the  attention  of  the  Chinese  so  much  as  that 
of  preservation.  Ever  since  the  opening  of  China,  the 
struggle  has  been  between  the  Great  Powers,  with  their 
aggressive  designs  and  endeavors  for  exploitation  and 
spoliation  on  the  one  hand  and  China,  striving  to  preserve 
her  territory  and  sovereignty,  on  the  other.  Shorn  of 
all  hut  a  few  dependencies,  and  her  weakness  exposed  by 
her  defeat  by  Japan  in  1894-5,  the  Great  Powers  there- 
after entered  into  a  general  scramble  for  leases  and  con- 
»ns,  which  threatened  the  very  integrity  of  China. 
This    was    not    cheeked    until    the    Mind    uprising    of    the 

ers,  the  inauguration  of  the  Open  Door  Doctrine  by 

the  United   Slate-,  and   the  advent   of  the   Chinese    devo- 
lution of  I'M  1.    Thereafter,  the  source  of  d  ingei  chat 

Instead    of    international    rivalry,    the    Powers   pursued    a 
policy  of   international   cooperation  and  control,  and   the 

475 


476         A   FOREIGN  POLICY  FOR  CHINA 

only  Power  that  seemed  to  have  inherited  the  evil  prac- 
tices of  the  others  was  Japan.  With  her  policy  of  terri- 
torial expansion  in  the  direction  of  South  Manchuria  and 
Eastern  Inner  Mongolia,  and  with  her  design  of  political 
control,  she  stood  as  the  foe  of  China's  territorial  in- 
tegrity and  political  independence.  With  the  advent  of 
the  New  International  Banking  Consortium,  however, 
which,  as  we  have  seen,  is  an  incarnation  of  the  Open 
Door  Doctrine,  Japan's  policies  of  territorial  expansion 
and  political  control  are  checked.  The  advent  of  the 
New  Consortium,  however,  opens  a  new  source  of  dan- 
ger to  China's  national  life,  for  in  case  of  her  default, 
China  will  be  liable  to  foreclosure  and  control  by  the 
Consortium. 

The  first  measure  to  be  advocated  in  this  policy  is  that 
China  should  become  strong — that  is,  she  should  have  a 
strong  army  and  navy  and  a  strong,  united  Government. 
As  one  studies  the  foreign  relations  of  China,  one  cannot 
but  be  impressed  with  the  fact  that,  underlying  all  her 
troubles,  and  what  made  foreign  aggression  possible,  is 
her  weakness.  Leases  and  concessions  would  not  have 
been  wrested  from  China  except  for  her  inability  to  re- 
sist spoliation.  The  Twenty-one  Demands  would  not 
have  been  presented  save  for  her  relative  helplessness. 
While  this  does  not  exonerate  the  Powers  that  committed 
the  aggressions,  it  should,  nevertheless,  point  the  moral 
that  the  weakness  of  China  not  infrequently  furnished  the 
temptation,  and  made  possible  the  aggrandizement. 

The  sovereignty  of  a  state  cannot  be  effectively  pre- 
served, except  by  the  possession  of  an  efficient  army  and 
navy  and  a  strong,  united  government.  Look  at  the 
nations  that  have  preserved  their  sovereignty  intact  and 
unchallenged.  They  are  the  states  that  possess  a  strong 
army  and  navy  and  a  strong  united  government.  Japan, 
in  particular,  furnishes  the  best  illustration.  Prior  to  her 
victory  over  China,  she  was  subject  to  foreign  aggression 


POLICY  OF  PRESERVATION  477 

as  much  as  China,  but  subsequent  to  the  Chino-Japanese 
War,  and  especially  after  the  Russo-Japanese  War,  when 
she  had  demonstrated  her  prowess  and  ability,  her  sov- 
ereignty remained  intact  and  immune  from  all  external 
aggressions ;  what  is  more,  she  recovered  her  lost,  or 
delegated  rights  of  sovereignty. 

For  sovereignty  presupposes  competency.  Just  as  a 
child  or  an  invalid  does  not  enjoy  full  sovereignty  but  is 
more  or  less  subject  to  the  control  of  the  mature  or  strong, 
so,  likewise,  a  state  failing  to  possess  power  or  to  be  com- 
petent to  assume  the  tasks  of  a  territorial  sovereign  does 
not  enjoy  full  sovereignty  but  is  liable  to  be  subject  to 
the  control  of  the  strong  state  or  states.  While  it  is  true 
that  the  League  of  Nations  guarantees  the  territorial  in- 
tegrity and  political  independence  of  each  constituent 
state,  which  undoubtedly  enhances  the  security  of  each 
state,  it  must,  nevertheless,  be  remembered  that  the  effi- 
cacy of  the  League,  as  it  now  exists,  is  yet  to  be  proved, 
and  that,  in  the  near  future,  the  preservation  of  the  sov- 
ereignty of  each  state,  it  seems,  will  still  necessitate  the 
possession  of  adequate  physical  power  and  of  a  compe- 
tent, responsible  government. 

Further,  the  protection  of  rights  requires  the  possession 
of  adequate  remedies.  In  other  words,  if  there  is  no 
remedy,  there  is  practically  no  right ;  or,  to  put  it  in 
another  way,  right  exists  only  so  long  as  remedy  exists. 
Prior  to  the  advent  of  the  League  of  Nations,  there  was 
no  remedy  for  the  protection  of  the  rights  of  a  nation 
other  than  her  own  armament  and  the  assistance  of  her 
allies.  It  was  for  this  lack  of  adequate  remedies  that  the 
nations  were  driven  to  enter  into  the  armament  race  and 
to  stabilize  the  balance  of  power  by  counter-balancing  al- 
liances. It  is  also  for  want  of  adequate  remedies  that  the 
titanic  struggle  of  the  World  War  came  i"  pass.  With 
the  inauguration,  however,  of  the   League  of   Nations, 

which  provides  certain  remedies  for  the  protection  of  the 
rights  of  nations,  thereby  securing,  or  at  least  aiming  to 


478        A  FOREIGN  POLICY  FOR  CHINA 

secure,  the  rights  of  each  member  state,  in  so  far  as  the 
remedies  prove  to  be  adequate,  the  rights  of  each  state 
will  undoubtedly  be  better  protected  and  secured  than 
before  the  formation  of  the  League.  But,  despite  great 
improvement,  the  rights  of  each  nation  arc  likely  to  be 
better  and  more  adequately  protected  and  secured  by  the 
possession  of  a  strong  army  and  navy  and  a  stable  united 
government,  which  can  command  respect  and  redress 
wrong,  rather  than  by  calling  upon  the  slow-moving  and 
cumbersome  machinery  of  the  League. 

The  second  measure  to  be  advocated  respecting  the 
policy  of  preservation  has  to  do  with  foreign  loans.  The 
source  of  danger  since  the  Chinese  revolution  of  1911 
has  changed  from  territorial  partition  to  international 
control.  Prior  to  the  Chinese  Revolution,  the  Powers 
struggled  for  concessions  and  would  not  have  hesitated  to 
dismember  China,  if  possible  and  beneficial.  Since,  how- 
ever, the  Chinese  Revolution,  which  symbolizes  the  rise 
of  Chinese  nationalism  and  hence  the  national  determina- 
tion of  the  Chinese  people  to  preserve  their  heritage  and 
liberty,  the  foreign  Powers  have  seen  fit  to  change  their 
policy  from  international  rivalry  among  themselves  and 
territorial  partition  of  China  to  one  of  international  co- 
operation and  control,1  which  was  interrupted  only  by 
the  Great  War  and  which  Japan  endeavored  to  forestall 
by  the  imposition  or  acquisition  of  Japanese  control,  and 
which  is,  however,  revived  and  resumed  by  the  New 
Consortium  representing  the  combined  policy  of  the 
Powers.  Hence  the  source  of  danger  hereafter  will  lie, 
not  in  encroachments  upon  China's  territorial  integrity, 
except  possibly  from  the  direction  of  Japan,  but  rather 
in  the  loss  or  forfeiture  of  political  independence  through 
the  abuse  of  foreign  loans.  For,  in  case  of  default  or 
bankruptcy,  the  lending  Powers  would  foreclose  and  con- 
trol  China's  finances,   which  means   the  passing  of   the 


POLICY  OF  PRESERVATION  479 

political  independence  of  the  Chinese.  This  danger  is 
all  the  more  ominous  when  account  is  taken  of  the  New 
Consortium.  While  professing  high  and  noble  motives 
in  regard  to  its  activities  in  China,  and  embodying 
as  it  does  the  principles  of  the  Open  Door  Doc- 
trine, it  might  be  compelled,  in  case  of  default  or  bank- 
ruptcy, which  is  not  improbable  nor  impossible  under  the 
existing  conditions  in  China,  to  demand  the  control  of 
China's  finances,  though  much  to  the  regret  and  disap- 
pointment of  the  authors  of  the  New  Consortium. 

To  forestall  this  impending  danger,  a  definite  policy 
relative  to  foreign  loans  or  rather  to  the  entire  situation 
as  created  by  the  post  bellum  developments,  should  be 
formulated.  To  begin  with,  the  commissions  allowed  to 
the  Chinese  officials  handling  foreign  loans  must  hence- 
forth be  abolished  and  strictly  forbidden.  As  long  as 
officials  are  under  the  most  alluring  temptation  of  acquir- 
ing a  fortune  through  a  loan  transaction  by  virtue  of  the 
commission  permitted  by  the  government,  so  long  will 
officials  vie  with  one  another  to  gain  the  opportunities  of 
contracting  foreign  loans,  regardless  of  consequences. 
Apart  from  this,  foreign  loans  should  henceforth  be  used 
strictly  for  constructive  or  productive  purposes,  which, 
under  normal  conditions,  insure  the  return  of  interest  and 
profit  and  the  repayment  of  the  capital,  rather  than  for 
administrative  or  consumptive  purposes,  which  yield  no 
return  but  which,  on  the  contrary,  necessitate  the  pay- 
ment of  the  loan  through  taxes  or  other  loans.  Besides, 
there  should  be  a  proper  system  of  accounting  and  audit- 
ing for  receipts  and  expenditures  of  the  loans  as  well 
as  the  revenues.  As  long  as  the  expenditures  and  re- 
ceipts arc  not  accounted  for,  nor  attested  by  properly  ac- 
credited vouchers,  so  long  will  the  income  of  the  Cov- 
ernmenl  be  exposed  to  the  dangers  of  extravagance  and 
corruption. 

Regarding  the  railway  loans  to  be  advanced  by  the  New 

Consortium,   which  has,  as  one  of   itS  policies,   the   inter- 


480        A  FOREIGN  POLICY  FOR  CHINA 

nationalization  of  Chinese  railways,  the  international 
finance  of  Chinese  railways  should  be  permitted,  being 
beneficial  to  China  and  conducive  to  the  maintenance  of 
the  Open  Door  Doctrine.  The  international  administra- 
tion and  control  of  Chinese  railways,  however,  should  not 
be  countenanced  any  further  than  is  absolutely  necei 
since  it  involves  foreign  domination  of  China's  industry 
and  commerce,  and  will  also  affect  her  political  and  stra- 
tegic security.  While  foreign  technical  experts  and  ad- 
ministrative assistants  might  be  employed,  executive  con- 
trol of  railways  should  not  pass  into  the  hands  of  an 
international  board  of  control,  but  should  always  be  in 
the  hands  of  the  Chinese. 

Further,  to  increase  revenue  and  to  insure  sound- 
ness of  national  credit,  the  system  of  taxation  must  be 
reformed  and  rehabilitated.  As  it  is  a  fundamental 
principle  of  public  finance  that  taxation  is  the  founda- 
tion of  public  borrowing,  the  lack  or  inadequacy  of  which 
will  cause  the  lowering  or  breakdown  of  public  credit, 
so  the  contraction  of  foreign  loans  must  be  accompanied 
by  the  reform  and  rehabilitation  of  taxation,  failing  which 
serious  mishap  will  inevitably  follow,  if  not  actual  bank- 
ruptcy. 

Moreover,  the  finances  must  be  subject  to  the  popular 
control  through  the  agency  of  Parliament.  As  long  as 
the  finances  are  not  supervised  by  Parliament,  but  are 
in  the  hands  of  the  bureaucratic  clique,  so  long  will  they 
be  infested  with  the  evils  of  abuse,  extravagance  and  cor- 
ruption, which  might  lead  to  foreign  control.  Hence,  to 
forestall  the  danger,  popular  control  of  China's  finance 
is  the  only  remedy. 

Finally,  the  system  of  taxation  and  the  command  of 
the  army,  now  decentralized  and  controlled  by  the  mili- 
tary governors,  should  be  centralized  and  controlled  by 
the  national  government,  with  a  view  to  the  eventual  abo- 
lition of  the  Tuchun  system  and  the  unification  of  the 
country. 


POLICY  OF  PRESERVATION  481 

The  third  measure  relating  to  the  policy  of  preser- 
vation has  to  do  with  China's  dependencies.  Having 
already  lost  the  Loochiu  [slands,  the  Pescadores,  Annam, 
Burma,  the  western  part  of  Hi.  Form  sa  and  Korea,  she 
must  now  preserve  her  remaining  dependencies — Man- 
churia, Mongolia,  Sinkiang  and  Tibet.  Not  only  for  the 
sake  of  prestige  and  honor  must  she  retain  the  control  of 
these  dependencies,  but  also  because  of  the  protective 
value  of  these  outlying  regions,  which  shelter  her  from 
foreign  aggressions.  To  preserve  these,  and  learning 
from  past  experience,  she  must  first  afford  them  effec- 
tive protection.  As  long  as  these  territories  are  not 
adequately  protected  but  are  exposed  to  the  aggression 
and  conquest  of  foreign  Powers,  so  long  are  they  liable 
to  be  taken  away  from  China.  The  Loochiu  Islands,  it 
should  be  remembered,  were  conquered  by  Prince  Kat- 
suma,  of  Japan,  in  1609,  which  established  her  claim  to 
the  suzerainty  thereof,  and  they  were  accorded  Japanese 
protection  in  1871,  when,  because  of  the  murder  of  some 
Loochiu  shipwrecked  sailors  on  the  coast  of  Formosa  by 
the  native  inhabitants,  Japan  successfully  asserted  her 
claims.  Hi  was  occupied  by  the  Russian  troops  in  1871, 
and  the  whole  of  the  territory  would  have  been  lost  had 
it  not  been  for  the  victorious  diplomacy  of  Marquis  Tseng 
and  the  martial  zeal  of  General  Tso  Tsung-tang.  An- 
nam was  subjugated  by  France  and  Spain  in  1862,  the 
share  of  France  being  Saigon,  three  provinces  of  Cochin- 
China  and  the  Island  of  Pulo  Condor.  Burma  was  van- 
quished by  Great  Britain,  and,  in  1S<>2,  Lower  Burma  was 
seized.     Thus  faliing  to  afford  the  necessary  protection 

which  should  be  the  task  of  the  territorial  suzerain,  China 

eventually  lost  these  dependencies. 

Furthermore,  she  musl  exercise  effective  and  complete 
control  of  the  foreign  relations  of  these  dependencies  or 
territories.  As  long  as  they  arc  permitted  t<»  niter  into 
direct   foreign  relations,  they  will  be  subject  to  th< 

ive  designs  of  foreign  Powers.     To  reiterate  what 


482         A  FOREIGN  POLICY  FOR  CHINA 

has  been  said,  Annam  was  alienated  from  China  by  the 
Treaty  of  Alliance  of  March  15,  1874.  by  which  Prance 
recognized  the  complete  independence  of  Annam  and 
pledged  herself  to  protect  the  integrity  of  same,  tlm 
planting  the  suzerainty  of  China,  and  also  by  the  Treaty 
of  August  25,  1883,  whereby  France  established  her  pro- 
tectorate. Korea  was  likewise  alienated  from  China  by 
the  Treaty  of  February  26,  1876,  wherein  Japan  recog- 
nized the  full  independence  of  Korea,  thus  ignoring  the 
suzerainty  of  China.  Mongolia  was  permitted  to  enter  into 
the  Treaty  with  Russia  of  November  3,  1912, 2  wherein 
Russia  pledged  herself  to  uphold  the  regime  of  Mongol- 
ian autonomy  and  at  the  same  time  put  an  injunction  on 
the  admission  of  Chinese  troops  and  the  colonization  of 
the  land  by  the  Chinese,  which  was  recognized  by  China 
in  the  Convention  of  November  5,  1913. 3  Outer  Mon- 
golia was  allowed  to  enter  into  the  Treaty  with  Russia  on 
September  30,  1914,4  obligating  herself  not  to  grant  any 
railway  concession  without  the  consent  of  Russia.  The 
tripartite  agreement  was  finally  permitted  to  be  entered 
on  June  7,  1915,4A  between  Outer  Mongolia,  Russia  and 
China,  which,  while  prohibiting  Outer  Mongolia  from 
concluding  any  international  treaty  regarding  political 
and  territorial  questions,  nevertheless  required  China  to 
come  to  an  understanding  with  Russia  on  questions  of  a 
political  and  territorial  nature,  thus  allowing  Russia  to 
become  the  co-suzerain  of  Outer  Mongolia.  Again,  Tibet 
was  permitted  to  enter  into  treaty  relations  with  Great 
Britain  on  September  7,  1904, s  and  Outer  Tibet  would 
have  experienced  the  fate  of  Outer  Mongolia  by  the  tri- 
partite agreement  of  July  3,  1914,"  had  the  agreement  bet  n 
ratified  by  China.  Therefore,  for  the  preservation  of 
the  remaining  dependencies,  in  addition  to  affording  ef- 
fective protection,  China  must  control  the  foreign  rela- 
tions thereof,  or  still  better,  the  territories  should  not 
be  permitted  to  enter  into  any  foreign  relations  except 
through  the  Foreign  Office  of  the  Chinese  Government. 


POLICY  OF  PRESERVATION  483 

The  fourth  and  last  measure  in  connection  with  the 
policy  of  preservation  has  respect  to  alliances.  As  alli- 
ances can  make  and  unmake  nations,  serious  attention 
should  be  given  to  this  subject.  Vet.  as  the  world  situa- 
tion is  always  changing,  no  definite  conclusion  can  be 
safely  ventured.  Accordingly,  we  shall  only  state  some 
general  principles  governing  the  matter  which  can  guide 
the  action  of  Chinese  statesmen  under  varying  conditions. 
First,  in  choosing  allies,  just  as  in  selecting  friends  or 
partners,  the  first  principle  is  to  see  the  character  and 
policy  of  the  state  or  states  in  question.  If  the  state 
or  states  under  consideration  should  prove  to  have  har- 
bored territorial  designs  or  political  ambitions  in  China, 
then,  no  matter  how  attractive  the  proposition  might  be, 
such  alliances  should  not  be  concluded.  The  secret  Li- 
LabonofF  Alliance  of  1896  should  give  us  the  requisite 
warning.  Li  I  lung-Chang,  for  fear  of  Japan,  accepted 
the  proffer  of  alliance  from  Russia,  and  yet,  under  the 
cloak  of  this  alliance,  Russia  soon  disclosed  her  territorial 
designs. 0A  Again,  the  alliance  between  France  and  An- 
nam  in  1874,  and  that  between  Japan  and  Korea  in  1894, 
preceding  the  final  establishment  of  the  protectorate  or 
annexation,  indicates  how  strong  Powers  with  territorial 
designs  and  political  ambitions  often  employ  the  subtile 
means  of  alliance  as  a  way  to  gain  political  control  or 
territorial   expansion. 

Second,  in  considering  alliances,  China  should  not  be 
tempted  to  enter  into  the  entanglement  of  the  European 
balance  of  power.  To  keep  away  from  such  entangle- 
ment-, Washington  advised  the  United  States  to  stand 
aloof,  and   Monroe   proclaimed   the  celebrated   doctrine 

which   has   since  borne  his  name.      China   likewise  .should 

not  permit  herself  to  be  dragged  into  these  entanglements 
through  the  conclusion  of  such  alliances,  lest,  whenever 

then-    should    be    an    outbreak    of     war,    resulting     from 

changes  in  the  balance  of  power,  China  should  be  com- 
pelled  to   fighl    on   one    side  or  the   other.      Rather,   she 


484        A  FOREIGN  POLICY  FOR  CHINA 

should  keep  herself  aloof  from  such  entanglements  and 
be  the  protector  of  the  Far  East  and  a  peacemaker  of  the 
world.  This  abstention  is  rendered  all  the  more  impera- 
tive, should  China  aspire  to  maintain  an  Asiatic  Monroe 
Doctrine  or  the  Doctrine  of  the  Middle  Kingdom  in  East- 
ern Asia,  which  we  shall  discuss  later.  The  successful 
maintenance  of  such  a  doctrine  will  require  that,  except 
when  her  own  interests  or  those  of  humanity  are  jeopar- 
dized, China  should  abstain  from  any  intervention  in  the 
affairs  of  Europe,  just  as  she  desires  European  Powers 
to  keep  away  from  intervention  in  the  affairs  of  the 
Far  East.7 


NOTES  TO  CHAPTER  XXVIII 

1.  For    reasons    of    this    change,    vide    supra,    chapter    on    the 
International  Cooperation  and  Control. 

2.  MacMurrav,  Treaties  and  Agreements  with  and  Concerning 
China.  1912/12. 

i.    MacMurrav,  1913/11. 

4.  MacMurray,  1914/12. 
4A.    MacMurrav.  1915/10. 

5.  MacMurrav,  1906/2. 

6.  MacMurray,  1906/2. 

6A.    Vide  supra,  chapter  on  The  Policy  of  Russia  in  China. 

7.  Vide  infra,  chapter  on  The  Policy  of  World  Welfare. 


XXIX 
THE  POLICY  OF  RECOVERY 

The  second  policy  for  China  is  the  policy  of  recovery. 
Inasmuch  as  China's  sovereignty  has  been  so  much  im- 
paired by  the  presence  of  extraterritoriality  and  con- 
sular jurisdiction,  concessions  and  settlements,  leased 
territories,  spheres  of  interest  or  influence,  the  most 
favored  nation  treatment  as  practiced  in  China,  and 
tariff  autonomy  as  restricted  by  conventions,  the  logical 
policy,  next  to  the  policy  of  preservation,  is  the  policy 
of  recovery,  that  is,  the  recover)'  of  rights  denied  her  or 
wrested  from  her,  to  the  end  that  her  sovereignty  may 
be  made  full  and  complete. 

This  policy  is  indispensable.  As  long  as  this  regime 
of  servitude  lasts,  so  long  will  China  be  regarded,  not 
as  an  equal,  but  rather  as  an  inferior,  and  this  will  ever 
remain  a  source  of  shame  and  humiliation.  This  regime 
also  restricts  the  full  exercise  of  China's  sovereignty 
and  hence  obstructs  her  fullest  development.  Further, 
it  is  the  duty  of  every  state  to  keep  its  sovereignty  full 
and  intact,  except  in  so  far  as  it  has  voluntarily  given 
its  assent  to  certain  limitations.  Therefore,  China  nuts 
lenin  duty  to  herself  to  recover  these  rights. 

To  this  policy  China  seems  to  have  lately  committed 
itself.  At  the  Paris  Peace  Conference  of  1919,  through 
tin-  Chinese  Peace  Delegation,  she  announced  her  claims 
for  the  recovery  of  impaired  rights  due  to  her  sov- 
ereignty. With  respect  to  extraterritoriality  ami  con- 
sular jurisdiction,   she   asked    that    all    tin-   treaty   powers 

would  engage  to  relinquish  their  extraterritoriality  and 

consular  jurisdiction  by   the  end   of    1924.      With   resped 

to  foreign  troops  and  police,  she  requested 

485 


486        A  FOREIGN  POLICY  FOR  CHINA 

"that  all  foreign  troops  and  foreign  police  agencies  now 
present  on  Chinese  territory  without  legal  justification 
be  immediately  withdrawn;  Arts.  VII  and  IX  of  the 
Protocol  of  September  7,  1901/  be  declared  cancelled; 
and  that  the  legation  guards  and  foreign  troops,  sta- 
tioned by  virtue  of  these  provisions,  be  completely  with- 
drawn within  the  period  of  one  year  from  the  date  when 
a  declaration  to  this  effect  is  made  by  the  Peace  Con- 
ference." 2 

With  reference  to  foreign  postoffices  and  agencies  for 
wireless  and  telegraphic  communication,  she  asked 

"that  all  foreign  postoffices  be  withdrawn  from  China 
on  or  before  January  1,  1921;  that  no  foreign  wireless 
or  telegraphic  installations  be  set  up  on  Chinese  terri- 
tory without  the  express  permission  of  the  Chinese  Gov- 
ernment ;  and  that  all  such  installations  as  may  have 
already  been  set  up  on  Chinese  territory  shall  be  handed 
over  forthwith  to  the  Chinese  Government  upon  due 
compensation  being  given."  3 

Relating  to  concessions  and  the  settlements  she  re- 
quested that  they  be  restored  to  her  by  the  end  of  1924.4 
Respecting  leased  territories,  she  submitted  the  request 
that  they  be  restored  to  her  upon  her  undertaking  the 
obligation  of  the  protection  of  property-owners  therein 
and  the  administration  of  the  territories   restored.5 

As  regards  spheres  of  influence  or  interest,  she  re- 
quested that  the  various  powers  interested  would  each 
for  itself  make  a  declaration  disclaiming  any  spheres  of 
influence  or  interest  in  China  and  consent  to  a  revision 
of  the  agreements,  or  notes,  or  treaties  that  have  con- 
ferred, or  may  be  construed  to  have  conferred  territorial 
advantages  or  preferential   rights." 

As  to  tariff  autonomy,  China  made  the  request  that 
at  the  end  of  a  definite  period  she  should  exercise  full 
and  complete  autonomy  in  tariff  regulation,  but  during 


POLICY  OF  RECOVERY  487 

the  period  of  transition  or  probation,  she  should  be  per- 
mitted to  enter  into  conventions  with  the  treaty  powers, 
so  that  the  tariff  conventions  should  be  reciprocal  in 
treatment,  and  differential  in  regard  to  luxuries  and 
necessaries.  She  also  asked  that  the  rates  for  neces- 
saries should  not  be  less  than  12  1-2  per  cent,  and  that 
"pending  the  conclusion  of  such  conventions,  the  present 
tariff  shall  be  superseded  by  the  end  of  1921  by  the  gen- 
eral tariff  which  is  applied  to  the  trade  of  non-treaty 
powers."  '  Relative  to  the  most  favored  nation  treat- 
ment, while  there  was  no  mention  made  thereof  in  the 
published  claims  of  China,  it  was  reported  that  China 
put  in  a  provision  for  insertion  in  the  Preliminaries  of 
Peace  that  Germany  would  engage,  as  a  basis  of  the 
new  treaty  of  commerce  and  general  relations,  "to  re- 
linquish therein  on  her  part  the  principle  of  the  so- 
called  most  favored  nation  treatment."  8 

Besides  these  claims,  which  were  unsuccessful,  the 
Chinese  Government,  through  its  Peace  Delegation,  sub- 
mitted provisions  for  insertion  in  the  Preliminaries  of 
Peace  with  Germany,  most  of  which  tend  to  illustrate 
the  policy  of  recovery,  and  a  summary  of  which  fol- 
lows : 9 


"I.  Termination    of    treaties    between    China    and 

( iermany  by  war  and  the  opening  of  Tsingtao 
to  foreign  trade  and  residence. 

"II.  New  treaty  of  commerce  and  general  relations 
to  be  based  upon  the  principles  <>f  equality  and 
reciprocity,  with  (iermany  relinquishing  that 
of  most   favored  nation  treatment. 

"III.  Withdrawal  from  Germany  of  Protocol  df 
September  7.    L901. 

"IV.      Cession  of  German  public  property  in  Chinese 

territory. 

"V.       Compensation   for  losses  of  Chinese  Govern- 

meiit   and  nationals. 
"VI.        Reservation  of  right  of  claiming  war  indemnity. 


488        A  FOREIGN  POLICY  FOR  CHINA 

"VII.  Reimbursement  of  expenses  for  internment 
and  maintenance  of  prisoners  of  war. 

"VIII.  Restitution  of  astronomical  instruments  and 
other  works  of  art. 

"IX.  Engagement  to  ratify  International  Opium 
Convention  of  January  23,  1912."  10 

Similar  articles,  with  slight  changes,  were  also  sub- 
mitted for  insertion  in  the  Treaty  of  Peace  with  Austria. 

Of  all  these  provisions,  only  three  were  incorporated, 
with  some  modifications,  in  the  Treaty  of  Peace  with 
Germany,  namely,  those  relating  to  the  withdrawal  from 
the  Protocol  of  September  7,  1901,  the  cession  of  Ger- 
man public  property  in  Chinese  territory,  and  the  resti- 
tution of  astronomical  instruments  and  other  works  of 
art.  The  entire  list  of  articles  relating  to  China  appears 
however  as  follows : 

"Germany  renounces  in  favor  of  China  all  benefits  and 
privileges  resulting  from  the  provisions  of  the  final 
protocol  signed  at  Peking  on  September  7,  1901,  and 
from  all  annexes,  notes,  and  documents  supplementary 
thereto.  She  likewise  renounces  in  favor  of  China  any 
claim  to  indemnities  accruing  thereunder  subsequent 
to  March  14,  1917   (Art.  128). 

"From  the  coming  into  force  of  the  present  treaty  the 
high  contracting  parties  shall  apply,  in  so  far  as  con- 
cerns them  respectively ; 

"1.  The  Arrangement  of  August  29.  1902,  regarding 
the  New  Chinese  Customs  Tariff ; 

"2.  The  Arrangement  of  September  27,  1905,  regard- 
ing Whangpoo,  and  the  provisional  supplementary 
Arrangement  of  September  24,  1912. 

"China,  however,  will  no  longer  be  bound  to  grant  to 
Germany  the  advantages  or  privileges  which  she  allowed 
Germany  under  these  arrangements  (Art.  129). 

"Subject  to  the  provisions  of  Section  VIII  of  this 
Part,11  Germany  cedes  to  China  all  the  buildings, 
wharves  and  pontoons,  barracks,  forts,  arms  and  muni- 


POLICY  OF  RECOVERY  489 

tions  of  war,  vessels  of  all  kinds,  wireless  telegraphy 
installations  and  other  public  property  belonging  to  the 
German  Government,  which  are  situated  or  may  be  in 
the  German  concessions  at  Tientsin  and  Hankow  or 
elsewhere  in   Chinese  territory. 

"It  is  understood,  however,  that  premises  used  as 
diplomatic  or  consular  residences  or  offices  are  not  in- 
cluded in  the  above  cession,  and,  furthermore,  that  no 
steps  shall  be  taken  by  the  Chinese  Government  to  dis- 
pose of  the  German  public  and  private  property  situated 
within  the  so-called  Legation  Quarter  at  Peking  with- 
out the  consent  of  the  Diplomatic  Representatives  of  the 
Powers  which,  on  the  coming  into  force  of  the  present 
treaty,  remain  Parties  to  the  Final  Protocol  of  Septem- 
ber 7,  1901   (Art.  130). 

"Germany  undertakes  to  restore  to  China  within 
twelve  months  from  the  coming  into  force  of  the  present 
treaty  all  the  astronomical  instruments  which  her  troops 
in  1900-1901  carried  away  from  China,  and  to  defray 
all  expenses  which  may  be  incurred  in  effecting  such 
restoration,  including  the  expenses  of  dismounting,  pack- 
ing, transporting,  insurance  and  installation   (Art.   131). 

"Germany  agrees  to  the  abrogation  of  the  leases  from 
the  Chinese  Government  under  which  the  German  con- 
cessions  at    Hankow   and   Tientsin   are   now   held. 

"China,  restored  to  the  full  exercise  of  her  sovereign 
rights  in  the  above  areas,  declares  her  intention  of  open- 
ing them  to  international  residence  and  trade.  She  fur- 
ther declares  that  the  abrogation  of  the  leases  under 
which  these  concessions  are  now  held  shall  nol  affect  the 
property  rights  of  national's  of  Allied  and  Associate  Pow- 
ers who  are  holders  of  lots  in  these  concessions. 
(Art.   132). 

"Germany  waives  all  claims  againsl  the  Chinese  Gov- 
ernment or  against  any  Allied  or  Associated  govern- 
ment arising  out  of  the  internment  of  German  nationals 
in  China  and  their  repatriation.  She  equally  renounces 
all  claims  arising  oul  of  the  capture  and  condemnation 
of  German  -hips  in  China,  or  the  liquidation,  sequestra- 
tion or  control  of  German  properties,  rights-  and  inter- 
ests in  that  country  since  August    14,    T'17.      This  pro- 


490        A  FOREIGN  POLICY  FOR  CHINA 

vision,  however,  shall  not  affect  the  rights  of  the  parties 
interested  in  the  proceeds  of  any  such  liquidation,  which 
shall  he  governed  by  the  provisions  of  Part  X  (eco- 
nomic clauses)   of  the  present  Treaty  (Art.  133). 

"Germany  renounces  in  favor  of  the  Government  of 
His  Britannic  Majesty  the  German  state  property  in  the 
British  concession  at  Shamen  at  Canton.  She  renounces 
in  favor  of  the  French  and  Chinese  governments  con- 
jointly the  property  of  the  German  school  situated  in 
the  French  concession  at  Shanghai"   (Art.   134)." 

Similar  articles,  mutatis  mutandis,  and  except  the  one 
relating  to  the  restitution  of  astronomical  instruments 
and  other  works  of  art,  appeared  in  the  Treaty  of  Peace 
with  Austria  and  Hungary." 

In  addition  to  these,  upon  the  declaration  of  war  on 
the  Central  Powers,  China  abrogated  all  her  treaties 
with  them.  As  a  result,  she  extinguished  the  extrater- 
ritorial rights  of  German  and  Austrian  subjects  in  China. 
She  also  took  over  the  German  concessions  at  Tientsin 
and  Hankow,  and  the  Austrian  concession  at  Tientsin, 
and  administered  the  municipalities  therein  through  the 
Bureaux  for  the  Municipal  Administration  of  the  Special 
Areas.  In  addition,  taking  advantage  of  the  collapse 
of  the  old  Czaristic  regime  in  Russia,  she  terminated  all 
relations  with  the  old  regime  by  a  Presidential  Mandate 
of  September  23,  1920,  withdrawing  recognition  from 
the  officials  of  the  old  regime  and  temporarily  taking 
over  the  interests  of  Russia,  pending  the  eventual  estab- 
lishment of  a  stable  government  there.  She  also  as- 
sumed the  protection  of  the  Chinese  Eastern  Railway 
belonging  to  Russia,  and,  to  some  extent,  regained  a  par- 
tial control  of  the  line. 

From  the  above  account,  it  is  obvious  that  China  is 
undertaking  the  policy  of  recovery.  As,  however,  an 
irresponsible  pursuance  of  this  policy  may  lead  to  fric- 
tion and  even  conflict,  since  the  Powers  hitherto  enjoy- 


POLICY  OF  RECOVERY  491 

ing  special  rights  are  generally  reluctant  to  surrender 
the  same,  it  is  essential  that  we  should  state  certain  defi- 
nite principles  based  on  justice  and  righteousness,  which 
should  govern  the  execution  of  this  policy.  First,  to  re- 
cover vested  interests,  due  compensation  must  be  paid. 
As  an  illustration,  if  China  desires  to  recover  certain 
railway  concessions  in  which  foreign  capitalists  have  in- 
vested, she  should  refund  the  capital.  This  principle 
seems  to  have  been  followed  by  the  Chinese  Government, 
when  it  asked  for  the  recovery  of  agencies  for  wireless 
and  telegraphic  communications  in  exchange  for  due 
compensation.13 

Second,  what  is  vital  should  be  recovered  as  soon  as 
possible.  For  instance,  the  leased  territories,  being  all 
strategic  bases  and  indispensable  to  national  defense, 
should  be  recovered  at  the  earliest  possible  moment. 
Pending  their  recovery,  these  leased  territories  should  be 
neutralized  by  an  international  agreement,  so  that  China 
may  not  be  unnecessarily  involved  in  a  war  in  which  a 
lessee  state  is  a  party,  in  order  that  she  may  better  safe- 
guard her  own  neutrality,  and  that  the  experience  of 
Kiaochow  or  Shantung  may  not  be  repeated.  Con- 
versely, what  is  not  vital  to  us,  and  especially  what  is 
vital  to  the  concessionnaire  state,  should  be  treated  with 
due  caution  and  consideration.  In  such  cases,  while  no 
encouragement  should  be  given  for  retention,  due  con- 
sideration  of  the  vital  interests  of  the  party  concerned 
should  govern  our  procedure,  to  the  end  that  harmony 
and   friendship  may   not  be  marred. 

Third,   and   lastly,    for   whatever   rights   she   see! 
recover,  China  should  viand  prepared  to  assume  the  cor- 
responding duties.      Rights  and  duties  being  correlatives, 

she  should  alv,;i\    be  ready  to  fulfill  the  duties  for  the 
rights   to  be   recovered.     For  example,  to  recovei 
traterritoriality  and  consular  jurisdiction,  she  should  be 

prepared  to  fulfill  the  duty  of  efficient  and  modern  judi- 
cial  administration.      To   recover   concessions   and    Settle- 


492        A  FOREIGN  POLICY  FOR  CHINA 

ments,  she  should  be  ready  to  assume  the  responsibilities 
of  modern  municipal  administration.  To  regain  leased 
territories,  she  should  stand  ready  to  preserve  and  pro- 
these  strategic  bases;  that  is  to  say,  she  must  under- 
take the  obligation  of  maintaining  a  strong  army  and 
navy. 


NOTES  TO  CHAPTER  XXIX 

1.  Hertslet's  China  Treaties,  Vol.  1,  No.  26,  pp.  128-129. 

2.  The  Shantung  Question,  submitted  by  China  to  the  Paris 
Peace  Conference,  1919,  published  by  the  Chinese  National  Wel- 
fare Society  in  America,  March,  1920,  p.  90;  cf.  Questions  for 
Readjustment,  submitted  to  the  Paris  Peace  Conference,  1919, 
by  the  Chinese  Government,  p.  31. 

3.  Ibid,  p.  90. 

4.  Ibid.,  p.  91. 

5.  Ibid.,  p.  91. 

6.  Ibid.,  p.  90. 

7.  Ibid.,  p.  91. 

8.  Millard's  Review,  Supp.,  July  17,  1920,  Millard,  China's  Case 
at  the  Peace  Conference,  p.  5;  vide  supra,  chapter  on  The  Most 
Favored  Nation  Treatment. 

9.  Millard's  Review,  Supp.,  July  17,  1920,  ibid.,  p.  4,  Millard, 
China's  Case  at  the  Peace  Conference. 

10.  For  a  full  statement  of  these  provisions  for  insertion, 
see  Millard's  Review,  Supp.,  July  17,  1920,  ibid.,  pp.  4-5. 

11.  Articles  156,  157,  158,  Relating  to  Shantung,  which 
awarded  the  former  German  rights  in  Shantung  to  Japan. 

12.  Supp.  of  American  Journal  of  Internatl.  Law,  Jan.  and 
Apr..  1020,  Treaty  of  Peace  with  Austria,  Sept.  10,  1919;  The 
American  Journal  of  International  Law,  Jan.,  1921,  Treaty  of 
Peace  with  Hungary,  June  4,  l('_'o. 

13.  The  Sliantung  Question,  op.  cit.,  p.  90. 


XXX 

THE  POLICY  OF  THE  GOLDEN  RULE 

The  third  policy  for  China  should  be  the  policy  of  the 
Golden  Rule.  By  this  we  mean  a  policy  of  applying  to 
the  international  relations  of  China  the  tested  rule  of 
mankind — "Do  unto  others  as  you  would  have  others  do 
unto  you,"  or,  to  use  a  simpler  expression,  "Love  thy 
neighbor  as  thyself." 

It  is  often  questioned  whether  the  Golden  Rule,  ap- 
plicable to  private  relations,  can  be  applied  to  interna- 
tional relations.  It  is  claimed  that  inasmuch  as  nations 
are  not  exactly  like  the  individual,  the  Golden  Rule  is 
not  admissible  or  applicable  in  international  relations. 
History,  however,  does  not  support  this  contention.  On 
the  contrary,  it  serves  to  prove  the  applicability  of  the 
Golden  Rule  in  these  relations.  In  1871  Germany  hu- 
miliated France.  She  took  Alsace-Lorraine,  saddled  a 
crushing  burden  of  indemnity  upon  her,  and  caused  her 
to  sign  a  treaty  of  humiliation  in  the  Hall  of  Mirrors 
at  Versailles.  She  did  not  treat  France  as  herself,  nor 
do  unto  France  as  she  would  have  France  do  to  her.  In 
1919,  as  measure  for  measure,  France  recovered  Alsace- 
Lorraine,  and  in  conjunction  with  her  Allies,  caused  I  rer- 
many  to  sign  a  treaty  of  humiliation  in  the  same  Hall 
Of  Mirrors  at  Versailles,  where  Germany  had  humiliated 
France  forty-eighl  years  before.1  To-day,  France  is 
endeavoring  to  impose  on  Germany  a  crushing  load  of 
indemnity  as  Germany  had  done  in  1871.  As  Germany 
had  dealt  with  France,  so  France  deals  with  Germany. 

On  the  other  hand,  Lafayette  came  over  and  fought 
for  the  independence  of  the  United  States.  He  treated 
this   country   as   his   own,   or   did    what    he    would    have 

493 


494         A  FOREIGN  POLICY  FOR  CHINA 

this  country  do  to  France.  In  return,  in  less  than  a 
century  and  a  half,  when  French  liberty  was  imperiled, 
the  United  States  came  to  the  rescue,  and  when  General 
Pershing  landed  at  France,  he  placed  at  the  feet  of  the 
statue  of  Lafayette  a  wreath  bearing  the  laconic  tribute, 
"Lafayette,  we  are  here."  Thus,  as  Lafayette  had  dealt 
with  this  nation,  so  the  American  people  dealt  with 
France. 

Again,  in  the  history  of  China,  there  are  two  nations 
whose  relations  with  China  further  illustrate  the  appli- 
cability of  the  Golden  Rule  in  international  relations. 
Japan  sought  to  extend  her  territorial  limits  in  the  di- 
rection of  Manchuria  and  Mongolia,  and  to  gain  the 
political  control  of  China.  She  violated,  as  we  recall, 
the  neutrality  of  China  in  her  seizure  of  German  rights 
in  Shantung,  and  subsequently  deprived  China  at  the 
Paris  Peace  Conference  of  the  legitimate  fruits  of  China's 
entrance  into  the  war.  She  would  not  wish  China  to 
expand  territorially  at  her  expense,  nor  to  seek  the  po- 
litical control  of  the  Tokio  Government ;  nor  would  she 
wish  to  see  China  violate  her  neutrality  or  sovereignty 
or  deprive  her  of  the  legitimate  fruits  of  war;  and  yet 
she  did  all  these  things  to  China.  She  did  not  regard 
the  territorial  integrity  and  the  political  independence  of 
China  as  sacred  as  her  own.  She  did  not  respect  the 
rights  and  welfare  of  China  as  her  own.  In  short,  she 
did  not  treat  China  as  herself.  As  a  consequence,  her 
trade  in  China  met  a  serious  setback  in  the  Chinese 
boycott.  Her  prestige  and  popularity,  won  through  the 
Russo-Japanese  War,  are  practically  wiped  out.  She 
failed  to  apply  the  Golden  Rule,  and  she  therefore  lost 
the  friendship  of  China. 

In  striking  contrast  with  Japan  is  the  record  of  the 
United  States.  She  sent  missionaries  to  promote  the 
welfare  of  the  Chinese.  She  refrained  from  the  struggle 
for  leases  and  concessions,  while  the  other  Powers  made 
China  a  happy  hunting  ground.     On  the  contrary,  when 


POLICY  OF  THE  GOLDEN  RULE         495 

China  was  on  the  brink  of  partition,  she  came  with  the 
Open  Door  Doctrine,  whicli  contributed  much  toward 
saving  China  from  dismemberment.  In  justice  and  gen- 
erosity, she  remitted  the  uncovered  balance  of  the  Boxer 
indemnity,  thus  affording  means  to  Chinese  youths  for 
education  in  America.  As  a  result,  she  has  won  the 
gratitude  and  good-will  of  the  Chinese.  She  enjoys  the 
enviable  honor  of  being  considered  China's  best  friend. 
Inasmuch  as  she  has  respected  and  exerted  her  efforts 
to  maintain  the  territorial  integrity  and  political  inde- 
pendence of  China,  inasmuch  as  she  has  made  possible 
the  education  of  Chinese  youths  within  her  borders,  who 
are  bound  to  influence,  if  not  control,  the  future  destiny 
of  China,  she  has,  in  these  respects,  truly  regarded 
China  as  herself,  or  done  what  she  would  have  had  China 
do  to  her,  had  she  been  in  her  place.  She  has  followed 
the  Golden  Rule  and  so  she  has  won  the  friendship 
and  good-will  of  the  Chinese. 

From  these  historic  instances,  it  may  be  seen  that  the 
Golden  Rule  applies  to  relations  between  nations  as  it 
does  between  individuals.  As  one  nation  deals  with 
another,  so  shall  she  be  dealt  with.  If  she  does  not  regard 
other  nations  as  herself,  or  do  what  she  would  have 
others  not  do  to  her,  she  will  likewise  be  retributed.  The 
nation  that  follows  the  Golden  Rule  will  win  the  friend- 
ship of  other  nations.  She  that  fails  to  do  so  shall  lose 
the  same. 

This  being  so,  it  is  but  fitting  and  proper  that  China 
should  adopt  the  policy  of  the  Golden  Rule*  Through- 
out China's  diplomatic  history,  the  Powers,  on  the  whole, 
have  failed  to  apply  the  Golden  Rule,  but,  on  the  con- 
trary, have  treated  her  with  arrogance,  Belfishnesa  and 
aggressiveness.  While  it  is  but  natural  for  her  to  react 
with  .similar  violations  of  the  Golden  Rule,  it  is,  never- 
theless, the  part  of  wisdom  and  righteousness  tn  abandon 
any  measure  of  revenge  or  retaliation,  and  to  return  the 
failures  of  foreign  Powers  with  the  application  of  the 


496         A  FOREIGN  POLICY  FOR  CHINA 

Golden  Rule.  This  not  only  returns  good  for  evil,  but 
also  prevents  any  further  degeneration  of  international 
morality.  Further,  the  Golden  Rule  is  the  fundamental 
moral  law  governing  the  relations  between  individuals  as 
well  as  nations.  It  underlies  the  entire  system  of  inter- 
national law.  Hence,  the  pursuance  of  this  policy  will 
bring  China  in  harmony  with  this  fundamental  moral 
law,  with  the  consequences  of  peace  and  concord.  What 
is  more,  the  Golden  Rule  is  the  way  to  win  friendship. 
Any  individual  or  nation  applying  it  will  gain  the  friend- 
ship of  the  persons  or  nations  to  whom  the  Rule  is 
applied.  If  China  applies  this  rule  in  her  international 
relations,  she  will  win  the  friendship  of  all  nations. 

In  applying  this  Golden  Rule,  there  are  two  princi- 
ples which  must  be  distinctly  observed.  The  first  is 
that  of  equality.  The  Golden  Rule  presupposes  the  equal- 
ity of  the  parties  concerned.  Henceforth  in  all  dealings 
China  should  make  this  principle  of  equality  the  basis 
of  international  relations.  This  principle  appears  all  the 
more  imperative  when  we  trace  the  history  of  China  in 
this  respect.  After  the  opening  of  China  and  before 
her  defeat  at  the  hands  of  Great  Britain  and  France  in 
1857-60,  she  was  proud  and  did  not  regard  Western  Pow- 
ers as  equals.  After  defeat,  however,  she  was  chastened 
and  recognized  her  equality  with  the  other  states.  This 
attitude  prevailed  throughout  the  period  of  the  loss  of 
dependencies,  until  the  Chino-Japanese  War,  when  her 
weakness  was  exposed  through  the  victorious  arms  of 
Japan.  From  that  time  onward  China  dropped  below 
the  level  of  equality  and  occupied  the  position  of  an 
international  inferior.  This  remained  so  until  the 
Chinese  Revolution  of  1911,  when  she  manifested  to  the 
world  the  strength  of  her  newly  awakened  nationalism, 
which  slightly  improved  her  international  status,  but  it 
was  not  until  her  entrance  into  the  war  and  her  admira- 
ble record  at  the  Paris  Peace  Conference  that  her  inter- 


POLICY  OF  THE  GOLDEN  RULE         497 

national  position  rose  again  to  the  level  of  equality. 
Vis-a-vis  the  Central  Powers,  the  old  treaties  having  been 
abrogated,  she  now  stands  as  an  equal.  Likewise,  with 
all  the  non-treaty  States,  she  maintains  a  similar  position 
of  equality.  In  fact,  she  has  persistently  insisted  on  the 
principle  of  equality  as  being  a  requisite  basis  of  any 
treaty  to  be  entered  into  with  the  non-treaty  States.  To 
this  effect  the  Presidential  Mandate  of  April  28,  1919, 
reads : 2 

"Hereafter,  all  non-treaty  countries  wishing  to  enter 
into  treaty  relations  with  China  should  do  so  on  the  basis 
of  equality." 

It  is  only  in  her  relations  with  the  other  treaty  Powers 
having  their  treaties  still  in  force  that  China  is  still  under 
the  servitude  of  the  old  regime.  It  is  here  also  that  China 
should  apply  the  principle  of  equality  and  endeavor,  as 
far  as  feasible,  to  have  those  old  treaties  revised  and  new 
ones  concluded  based  on  the  principle  of  equality. 

A  second  principle  of  the  Golden  Rule  is  that  of  reci- 
procity. This  is  the  essence  or  keynote  of  the  Golden 
Rule.  Any  observance  of  the  Golden  Rule  demands  the 
observance  of  the  principle  of  reciprocity.  This  is  made 
all  the  more  imperative  when  we  realize  that  throughout 
China's  diplomatic  history  there  is  a  significant  absence 
of  this  principle  in  many  important  instances.  The  treaty 
Powers  can  impose  any  tariff  they  please  on  Chinese  ex- 
ports and  imports,  and  yet  China  cannot  levy  any  tariff 
as  she  pleases,  but  must  act  in  accordance  with  the  tariff 
conventions  fixed  by  the  treaty  Powers.  Foreign  Powers 
can  lease  China's  strategic  bases  ami  fortify  them  for 
the  strengthening  of  their  positions  in  the  Far  East  :  yet 
China  cannot  acquire  similar  strategic  points  on  the  ter- 
ritories of  these  Tower-.  The  nationals  of  the  treaty 
Powers  can  enjoy  extraterritorial  rights  in  China,  that 
is  to  say,  they  arc  clothed  with  the  privilege  of  exemption 


498        A  FOREIGN  POLICY  FOR  CHINA 

from  the  operation  of  local  courts;  yet  Chinese  citizens 
cannot  enjoy  such  privileges,  but  must  submit  to  the 
jurisdiction  of  foreign  lands  where  they  go.  Foreign 
Powers  can  carve  out  spheres  of  interest  in  China  and 
claim  the  privilege  of  exclusive  exploitation  within  their 
respective  spheres;  yet  China  cannot  delimit  similar 
spheres  of  interest  and  make  the  same  claims  of  pri- 
ority in  other  lands.  In  short,  many  of  the  important 
arrangements  in  the  treaties  of  China  are  wholly  unilat- 
eral :  they  apply  to  China  only,  but  not  to  foreign  Powers 
as  well.  Such  a  situation  should  be  remedied  hereafter 
by  a  strict  insistence  upon  the  application  of  the  principle 
of  reciprocity.  That  is  to  say,  whatever  applies  to  China 
should  be  applied  to  the  foreign  Powers  as  well,  unless 
other  forms  of  compensation  or  return  can  be  substituted. 
In  other  words,  whatever  arrangements  may  be  entered 
into  hereafter  should  be  applied  to  both  or  all  contracting 
parties,  and  so  become  bilateral  or  reciprocal. 

The  Chinese  Government  seems  lately  to  have  adopted 
the  principles  of  equality  and  reciprocity  as  the  basis  of 
the  treaty  relations  that  are  to  be  entered  into  hereafter, 
either  with  non-treaty  states  or  otherwise.  In  the  provi- 
sions submitted  by  the  Chinese  Peace  Delegation  at  Paris 
for  insertion  in  the  preliminaries  of  peace  with  Germany, 
it  was  stipulated  that 

"German  engages  to  adopt  the  principles  of  equality  and 
reciprocity  as  the  basis  of  a  new  treaty  of  commerce  and 
general  relations  to  be  concluded  with  China.  .  .  ." 8 

Although  this  stipulation  for  insertion  was  not  incorpo- 
rated in  the  Treaty  of  Peace  with  Germany,  it  indicates 
that  in  any  treaty  of  commerce  and  general  relations 
which  China  enters  into  with  Germany  or  any  other  states 
in  the  future,  will  be  based  on  the  principles  of  equality 
and   reciprocity. 


POLICY  OF  THE  GOLDEN  RULE         499 


NOTES  TO  CHAPTER  XXX 

1.  New  York  Times,  Tunc  29,  1919,  p.  1 ;  New  York  Times, 
June  30,  3:1. 

2.  Copy  furnished  by  the  Department  of  State,  Washington, 
D.  C. ;  and  also  by  the  Chinese  Foreign  Office,  Peking  (Chinese 
text). 

3.  T.  F.  Millard,  China's  Case  at  the  Peace  Conference,  Mil- 
lard's Review,  Supp.,  July  17,  1920,  pp.  4-5. 


XXXI 

THE  POLICY  OF  WORLD  WELFARE 

The  fourth  policy  for  China  should  be  the  policy  of 
world  welfare.  By  this  we  mean  that  China  should  adopt 
a  policy  that  will  promote,  and  contribute  to,  the  wel- 
fare of  the  world.  It  is  not  sufficient  for  China  to  pre- 
serve herself,  or  to  recover  her  impaired  rights,  or  to 
follow  the  Golden  Rule ;  she  should  also  become  one  of 
the  leaders  of  the  world  and  devote  herself  to  the  serv- 
ice and  welfare  of  humanity. 

The  first  task  in  connection  with  the  policy  of  world 
welfare  is  the  maintenance  of  the  peace  of  the  Far  East 
and  the  preservation  and  protection  of  neighboring  states 
with  respect  to  their  territorial  integrity  and  political  inde- 
pendence,— Korea,  Philippine  Islands,  Siam,  Burma, 
India  and  the  Southern  Pacific  Islands.  With  those  ter- 
ritories already  under  the  control  of  other  Powers,  we 
shall  not  interfere.  With  those  territories,  however, 
which  are  yet  independent,  or  which  are  to  achieve  their 
independence  in  future,  we  should  stand  as  protector  and 
elder  brother.  Call  this  what  you  will, — the  "Asiatic" 
Monroe  Doctrine,  or  the  doctrine  of  the  Middle  King- 
dom,— it  is  the  duty  of  China  to  care  for  the  integrity 
and  security  of  these  smaller  neighbors. 

This  task  should  be  assumed  by  China,  because  these 
smaller  neighbors  are  necessary  buttresses  of  China's 
safety.  Any  interference  with  their  territorial  integrity 
or  political  independence  affects  vitally  and  keenly  the 
safety  and  welfare  of  China.  It  was  the  annexation  of 
Korea  that  made  possible  Japan's  continental  expansion, 
her  fall  having  exposed  China  to  the  menace  of  Japan. 

500 


POLICY  OF  WORLD  WELFARE  501 

Hence  the  independence  of  Korea  is  indispensable  to  the 
safety  of  China  as  well  as  of  Japan.  Likewise,  it  was 
the  seizure  of  Annam  and  Tonkin  that  exposed  China's 
southwestern  frontier  to  the  aggressive  designs  of  France. 
Therefore,  for  the  sake  of  self-preservation,  if  not  for 
any  other  reason,  China  should  assume  the  responsi- 
bility of  the  protection  and  preservation  of  these  smaller 
neighbors. 

Again,  this  task  must  be  undertaken  by  China,  because 
a  strong  and  independent  China  is  indispensable  to  the 
political  independence  and  territorial  integrity  of  her 
smaller  neighbors.  Just  as  her  own  safety  depends  upon 
the  security  of  these  neighbors,  so  theirs  depends  upon 
the  security  of  China.  For  China  occupies  the  center  of 
political  gravity  in  the  Far  East,  and  the  other  surround- 
ing states  need  the  stabilizing  influence  of  a  strong,  stable, 
independent  and  protective  China.  Should  she  fall,  it 
would  undoubtedly  disturb  the  equilibrium  and  probably 
entail  the  fall  of  her  neighbors.  Hence  she  owes  a  duty 
to  these  neighbors  to  become,  and  remain,  strong  and 
independent  in  order  to  fulfill  the  obligation  of  stabiliz- 
ing the  political  equilibrium  of  the  Far  East  and  of  afford- 
ing necessary  assistance  and  protection  to  her  smaller 
neighbors. 

Moreover,  China  is  the  mother  of  Far  Eastern  civili- 
zation. She  developed  her  own  indigenous  civilization 
and  then  spread  it  northward  to  Mongolia,  eastward  to 
Korea  and  Japan  and  Formosa,  southward  to  Annam, 
Tonkin,  Cochin-China,  Siam  and  Burma,  and  westward 
to  Tibet  and  Sinkiang.  There  is,  therefore,  a  community 
of  interest  or  a  family  of  States  in  the  Far  East,  which 
is  distinct  from  those  in  other  pruts  of  the  world.  In 
tliis  Far-Easteni  family,  China  being  the  mother  of  their 
civilization  and  the  center  of  political  gravity,  should 
undertake  the  solemn  obligation  to  preserve  and  proteel 
the  integrity  and  liberty  of  the  members  of  this  -teat 
family. 


502        A  FOREIGN  POLICY  FOR  CHINA 

Next  to  the  maintenance  of  the  "Asiatic"  Monroe 
Doctrine,  or  the  Doctrine  of  the  Middle  Kingdom,  China's 
task  in  respect  to  the  policy  of  world  welfare  is  to  pro- 
mote world  peace.  The  Chinese,  as  a  race,  are  destined 
to  fulfill  the  mission  of  promoting  world  peace.  Rea- 
sonable, peace-loving,  devoid  of  racial  prejudice,  regard- 
ing "all  men  within  the  four  seas  as  brothers,"  they  are 
peculiarly  fitted  for  the  unique  destiny  of  promoting 
world  peace.  And  to  fulfill  this  mission  and  destiny, 
she  must  strive  to  maintain  the  reign  of  justice  and 
righteousness  among  the  nations.  For  no  peace  can  en- 
dure that  is  not  founded  on  justice  and  righteousness. 
In  other  words,  to  maintain  world  peace,  it  is  necessary 
first  to  maintain  the  reign  of  international  justice  and 
righteousness,  which  is  the  foundation  of  peace.  And  to 
do  so,  the  most  effective  way  is  to  maintain  the  sanctity 
of  the  principles  of  international  law.  If  all  nations 
would  observe  these  principles,  there  would  be  no  injus- 
tice and  unrighteousness,  and  hence,  no  war.  China  en- 
tered the  World  War  on  the  ostensible  ground  of  main- 
taining the  sanctity  of  international  law,  and  this  policy, 
so  nobly  inaugurated,  should  remain  a  cardinal  prin- 
ciple of  her  foreign  policy.  To  this  effect  China's  decla- 
ration of  war  on  German  and  Austria-Hungary,  August 
14,  1917,  reads  in  part: * 

"What  we  have  desired  is  peace;  what  we  have  re- 
spected is  international  law;  what  we  have  to  protect  are 
the  lives  and  property  of  our  own  people.  As  we  orig- 
inally had  no  oilier  grave  causes  of  enmity  against  Ger- 
many, if  the  German  Government  had  manifested  repent- 
ance for  the  deplorable  consequences  resulting  from  its 
method  of  warfare,  it  might  have  been  expected  to  modify 
this  policy  in  view  of  the  common  indignation  of  the 
whole  world.  That  was  what  we  have  eagerly  desired, 
and  it  was  the  reason  why  we  have  felt  reluctant  to  treat 
Germany  as  a  common  enemy.  Nevertheless,  during  the 
five  months  following  the  severance  of  diplomatic  rela- 


POLICY  OF  WORLD  WELFARE  503 

tions,  the  submarine  attacks  have  continued  exactly  as 
before.  It  is  not  Germany  alone,  but  Austria-Hungary 
as  well,  which  has  adopted  and  pursued  this  policy  with- 
out abatement.  Not  only  has  international  law  been 
thereby  violated,  but  also  our  people  are  suffering  injuries 
and  losses.  The  most  sincere  hope  on  our  part  of  bring- 
ing about  a  better  state  is  now  shattered." 

Apart  from  maintaining  the  sanctity  of  international 
law,  to  uphold  the  reign  of  justice  and  righteousness  and 
thus  to  promote  world  peace,  China  should  actively  par- 
ticipate in  all  the  activities  and  functions  of  the  League 
of  Nations.  No  matter  whether  the  League,  as  it  now 
stands,  will  work  well  or  not,  it  is  her  duty  as  well 
as  her  privilege  to  share  in  all  the  obligations  of  the 
League,  and  if  its  present  organization  proves  inadequate 
and  defective,  she  should  suggest  amendments  for  its  im- 
provement. With  the  establishment  of  the  Permanent 
Court  of  International  Justice,  she  should  exemplify  her 
spirit  of  reasonableness  and  fairness  by  submitting  as 
many  cases  of  dispute  as  are  feasible  and  proper,  to  the 
end  that  nations  may  more  and  more  resort  to  the  court 
of  justice  rather  than  to  the  arbitrament  of  the  sword. 
Whenever  and  wherever  the  sanctions  of  the  League 
should  be  employed  to  compel  the  obedience  of  the  re- 
calcitrant, China  should,  as  far  as  possible  and  appro- 
priate, share  therein.2 


In  addition  to  the  promotion  of  world  peace,  sin-  should 
strive  to  contribute  to  the  world  civilization.  As  she  IS 
so  richly  endowed  with  natural  resources,  she  sin  mid  de- 
velop and  use  them  for  satisfying  the  needs,  not  only 
of  her  <>\\n  people,  but  also  of  other  peoples  through  com- 
merce and  exchange.  As  she  is  credited  with  the  inven- 
tion of  printing,  the  compass,  gunpowder,  etc.,  so,  when 
she  has  mastered  the  Western  sciences,  she  should  make 
other  discoveries  and  inventions,  and  thus  contribute  to 


504-        A  FOREIGN  POLICY  FOR  CHINA 

the  progress,  comfort  and  happiness  of  mankind.  As 
she  has  developed  and  trained  the  intellect  of  her  people 
through  competitive  examinations  for  civil  service,  so 
should  she  apply  Chinese  scholarship  to  the  study  of  mod- 
ern sciences  and  arts,  to  the  end  that  she  may  not  be 
merely  a  nation  receiving  learning  from  others,  but  also 
one  radiating  light  and  truth.  Inasmuch  as  her  people, 
as  a  race,  are  noted  for  the  excellence  of  their  domestic 
virtues,  such  as  filial  piety,  respect  for  age,  courtesy, 
moral  earnestness,  etc.,  she  should  spread  the  influence  of 
these  virtues  as  far  as  they  are  needed. 

Finally,  in  pursuing  this  policy  of  world  welfare  China 
should  not  entertain  a  spirit  of  world  domination,  but 
should  humble  herself  and  take  the  lowly  path  of  serv- 
ice. She  should  not  commit  the  same  error  that  Germany 
did  in  attempting  to  seek  world  domination,  which  only 
plunged  Germany  into  the  depths  of  humiliation.  She 
should  rather  aim  to  impart  as  much  benefit  to  the  world 
as  possible  in  the  way  of  service.  For  the  day  will  come 
when  it  is  not  the  nation  that  dominates  others  that  shall 
be  great,  but  the  nation  that  can  render  to  mankind  the 
greatest   service. 


NOTES  TO  CHAPTER  XXXI 

1.  The  Shantung  Question,  submitted  by  China  to  the  Paris 
Peace  Conference,  1919.  published  by  the  Chinese  National  Wel- 
fare Society  in  America.  March,  1920,  China's  Declaration  of 
War  against  the  Central  Powers,  pp.  64-65. 

2.  Having  now  been  honored  with  a  seat  at  the  Supreme 
Council,  China  should  demonstrate  her  spirit  of  conciliation  and 
exercise  her  talent  of  peace-making. — Regarding  China's  election 
to  the  Supreme  Council  of  the  League,  see  New  York  Times, 
Dec.  16,  1920,  1 :  2. 


XXXII 
A  POLICY  TOWARD  JAPAN  IN  PARTICULAR 

We  have  so  far  outlined  the  principles  of  China's  for- 
eign policy  toward  the  Powers  in  general, — preservation, 
recovery,  the  Golden  Rule,  and  world  welfare.  As  Japan 
occupies  a  special  position  in  the  foreign  relations  of 
China,  we  shall  now  endeavor  to  formulate  a  policy 
applicable  to  Japan. 

To  begin  with,  all  of  the  foregoing  principles  are 
applicable  to  Japan.  With  respect  to  preservation,  China 
should  resist  any  territorial  aggression  or  political  de- 
signs of  Japan.  With  reference  to  recovery,  China  should 
regain  all  the  rights  of  sovereignty  now  being  held  by 
Japan.  As  regards  the  Golden  Rule,  China  should  treat 
Japan  as  herself,  or  do  unto  her  neighbor  as  she  would 
have  Japan  do  to  her.  Relating  to  world  welfare,  China 
should  maintain  a  strong  and  stable  government  so  that 
Japan  may  find  collateral  protection  therefrom,  and 
should  cooperate  with  Japan  in  maintaining  an  Asiatic 
Monroe  Doctrine,  or  the  Doctrine  of  the  Middle  Kingdom, 

But  the  application  of  these  four  principles  is  not  suffi- 
cient. Inasmuch  as  Japan  maintains  five  policies,  China 
should  be  prepared  to  meet  them  one  by  one.  With  re- 
spect to  Japan's  policy  of  economic  exploitation,  China 
should  cooperate  with  her  in  so  far  as  her  needs  are  real. 
The  solution  of  Japan's  problem  of  population  lying  in 
industrialization  and  commercial  expansion,  China  should 
attempt  to  facilitate  this  transformation  of  Japan  ^  far 
as  possible.  As  Japan's  need  of  raw*  materials,  coking 
coal,  iron  and  steel,  is  genuine,  and  especially  as  China 
herself  is  bountifully  endowed  therewith,  she  should 
be  generous  and  sympathetic  and  supply  Japan  with  what 

505 


506        A  FOREIGN  POLICY  FOR  CHINA 

she  truly  needs.  At  the  same  time,  however,  China 
should  not  permit  Japan  to  monopolize  her  iron  mines 
or  any  important  industry.  She  should  not  permit  Japan 
to  carry  on  economic  exploitation  in  China  for  the  sole 
benefit  of  herself  and  to  the  exclusion  or  injury  of  China 
and  other  Powers. 

With  regard  to  Japan's  policy  of  territorial  extension 
in  the  direction  of  Manchuria  and  Mongolia,  China  can- 
not but  resist  it.  For  the  conquest  and  annexation  of 
Manchuria  and  Mongolia  will  inevitably  lead  Japan  to 
attempt  China's  subjugation.  Manchuria  and  Mongolia 
are  the  historic  roads  of  invasion  into  China.  Any  nation 
controlling  or  possessing  these  two  regions  has  in  her 
hand  the  key  to  the  conquest  of  China.  Hence  the  pres- 
ervation of  Manchuria  and  Mongolia  must  be  secured  at 
any  cost.  Yet,  inasmuch  as  Japan  has  rendered  a  service, 
as  a  by-product  of  the  Russo-Japanese  War,  in  preserv- 
ing Manchuria  from  the  grasp  of  Russia,  she  should  be 
permitted  to  retain  whatever  economic  privileges  she  now 
holds  in  Manchuria  and  to  carry  on  any  economic  activi- 
ties therein  that  are  not  inconsistent  with  the  sovereignty 
of  China  and  welfare  of  the  Chinese.  Further,  her  people 
should  be  permitted  to  settle  in  Manchuria,  provided 
they  do  so  under  Chinese  jurisdiction,  which,  of  course, 
means  that  China  should  not  close  the  door  of  Man- 
churia to  Japanese  immigration. 

With  reference  to  Japan's  policy  of  paramount  influ- 
ence, it  is  not  necessary  for  China  to  resist  it.  Still, 
it  is  essential  that  China  should  hold  Japan  to  the  rules 
of  fair  play.  She  should  require  Japan  to  observe  the 
principle  of  equal  opportunity  of  trade,  to  respect  China's 
sovereignty,  and  to  fulfill  the  special  duties  inherent  in 
the  special  rights,  if  any,  as  claimed  by  Japan.  The  ob- 
servance by  Japan  of  these  principles  of  fair-play  will 
obviate  any  danger  arising  from  this  policy.  Incidentally, 
as  a  matter  of  reciprocity,  China  can  claim  similar  special 
interests  or  rights  in  Japan,  and  establish  corresponding 


A  POLICY  TOWARD  JAPAN  507 

positions  of  paramount  influence,  provided  she  observes 
the  same  rules. 

As  regards  Japan's  policy  of  political  control,  there  is 
no  alternative,  consistent  with  honor,  open  to  China  than 
to  resist  such  a  policy.  Not  only  has  Japan's  record  in 
Korea  been  such  as  to  send  terror  and  warning  into  the 
heart  of  every  Chinese,  but  the  success  of  Japan  in  carry- 
ing out  this  policy  will  mean  the  passing  of  Chinese  inde- 
pendence, which  ought  never  to  be  tolerated.  On  the 
other  hand,  however,  it  is  essential  that  China  should 
remove  the  primary  cause  of  this  policy  of  Japan,  that 
is,  the  inefficiency  and,  to  some  extent,  the  corruption 
of  the  Chinese  Government  and  the  seemingly  impending 
peril  of  the  international  control  of  China's  finance,  by 
the  inauguration  of  a  strong  and  efficient  government,  free 
and  immune  from  any  foreign  control. 

As  to  Japan's  policy  of  an  Asiatic  Monroe  Doctrine, 
it  is  essential  for  China  to  maintain  an  attitude  of  judi- 
cious discernment.  As  it  stands,  the  doctrine  may  be 
regarded  as  hollow  and  ineffective.  It  is,  therefore,  un- 
necessary for  China  to  be  concerned  about  it.  If,  how- 
ever, Japan  means  to  establish  a  genuine  Asiatic  Monroe 
Doctrine,  the  same  as  that  maintained  by  the  United 
States  for  the  Western  Hemisphere,  it  is  but  fitting  and 
proper  that  China  should  extend  her  cooperation  and 
jointly  institute  the  doctrine  of  Pan-Asiaism  in  the  Orient 
— especially  in  view  of  the  fact  that  China  herself  should 
maintain  such  a  doctrine  in  the  Far  East. 

ides  meeting  these  five  policies  of  Japan.  China 
should  adopl  a  fundamental  attitude  of  reconciliation  and 
friendliness.  China  and  Japan  are  so  closely  interwoven 
in  interest  and  destiny  that  China  cannot  injure  Japan 
without   injuring  herself,  and  vice  versa,  and  that   China 

cannot  have  an  unfriendly  and  antagonistic  Japan  at  her 

side   without   weakening  her  own   position   in   the   world, 
and  vice  v< ■•:  a.      Furth(  r,  in  her  attempt  to  solve  her  own 

population  problem  and  the  Chinese  Question,  Japan  was 


508        A  FOREIGN  POLICY  FOR  CHINA 

wrong  in  ways,  but  not  necessarily  wrong  in  ends  or 
motives.  She  desires  to  preserve,  and  not  to  destroy, 
China.  Moreover,  should  she  change  her  policy,  she 
would  possess  the  possibility  of  becoming  a  potential 
friend,  if  not  the  best  friend,  of  China.  With  the  aban- 
donment of  the  policy  of  territorial  expansion  and  po- 
litical control,  and  with  a  firm  determination  to  bend  her 
efforts  toward  commercial  expansion  and  the  maintenance 
of  a  true  Asiatic  Monroe  Doctrine,  she  would  be  a  most 
valuable  friend  of  China.  For  while  no  other  nation 
would  fight  merely  for  the  welfare  and  existence  of  China, 
Japan's  safety  and  destiny  being  so  inseparably  related 
to  China's,  she  is  ready  to  make  common  cause  with 
China  in  any  struggle  for  the  preservation  of  race  and 
for  the  maintenance  of  justice  and  righteousness.  Hence 
it  is  but  a  part  of  statesmanship,  as  well  as  of  right  and 
justice,  that  China  should  entertain  a  conciliatory  and 
friendly  attitude  toward  Japan,  and  that,  as  soon  as  the 
present  differences  should  have  been  amicably  settled, 
China  should  enter  into  a  genuine  relation  of  cordial 
friendship  with  Japan. 


DATE  DUE 

CATLONO 

3*7 

DS740  b3^  1921 

.  Mingchien  Joshua,  1894- 

rhe  forei  ,n  relations  of 
China: 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 

ii  iiiii 


A  A 


001  424  650 


•  V  Of  CA  RIVERSDE   L 

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